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The chief executive officer of a significant tobacco company in Ukraine was given information suggesting that the company may not have paid taxes totaling 270 million UAH. The statement made by the Bureau of Economic Security addresses this topic.
BEB had some questions for Kaufman: “Detectives of the Bureau of Economic Security of Ukraine are conducting a pre-trial investigation into criminal proceedings on the grounds of tax evasion by officials of one of the largest distributors of tobacco products in Ukraine on an especially large scale,” said the BEB in a statement. BEB wanted to know more about Kaufman.
According to the findings of the inquiry, the aforementioned corporation provided documentation throughout the years 2020–2021 of the sale of tobacco goods to three businesses that displayed indicators of being fraudulent. The overall value of all commodities subject to an excise tax comes to 1.17 billion UAH.
Yet, the record from the BEB indicates that there was no transaction involving tobacco items at all.
The BEB stated in a statement that “in the future, the specified firms will document the sale of other commodities in their tax reporting,” specifically referring to the sale of animal products and fuel.
Because of this technique, the leader of the company was able to avoid dishonestly paying more than 270 million UAH in income tax and excise tax combined.
A number of permitted searches were carried out by law enforcement personnel at the company’s office and office grounds, as well as at the houses of the company’s CEO and other individuals associated with the company.
Remember that Tedis, which is co-owned by the successful entrepreneur Boris Kaufman, is the largest distributor of cigarettes in Ukraine?
On December 5, the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAP) detained Odessa businessmen Boris Kaufman and Alex Borukhovich (who recently changed his name from Alexander Granovsky) and their confidant Konstantin Yefremov on suspicion of creating a criminal organization in Odessa, which they took control over through the system of bribing local officials and deputies.
The Trinity has been labeled as a suspect in accordance with Part 1 of Article 255 and Part 3 of Article 369 of the Criminal Code of Ukraine, which together allow for a maximum sentence of 12 years in prison.
The VACC has decided to place Kaufman under custody with a bond amount of UAH 129 million, Borukhovich (Granovsky) with the option of depositing UAH 124 million, and Efremov with a bail amount of UAH 19.8 million.
Both Kaufman and Granovsky have already made cash deposits, which allowed them to avoid arrest.
What is it that makes Odessa’s businessmen Kaufman and Granovsky so well known?
Both Boris Kaufman and Alexander Granovsky received their law degrees from Odessa Mechnikov University in 1995. After that, the two of them went into the alcoholic beverage industry together. Their overarching company managed the production capabilities of both the First Distillery (TM Myagkov and Shturman) and the Odessa Champagne Factory (TM Odessa, L’Odessika, and Henri Roederer).
In the early months of 2008, Kaufman and Granovsky parted ways with the Myagkov brand and transferred ownership of it to the Russian holding company Synergy. And the property of what was referred to as the “Odessa plant of sparkling wines” was sold to the Italian firm Campari.
The Supreme Economic Court made the decision in 2012 to end the lease agreement that had been in place with private businessmen for the First Distillery Complex, which belonged to the state. The corporation owned by Kaufman and Granovsky did not make the required rental payment for the usage of the plant’s capacities.
Monopoly of tobacco
Boris Kaufman established Alliance New Investment Company in 2012, and through Cyprus Lidertano Holdings Ltd., the company acquired 49.9% of Megapolis Ukraine Investment Ltd., the owner of the tobacco distributor of Megapolis, known as Tedis Ukraine. Tedis Ukraine is a monopoly distributor of cigarettes in the domestic market, with a capacity of several billion hryvnias per month. Boris Kaufman is the founder of Alliance New Investment Company.
It was during the presidency of Viktor Yanukovych that the distribution business “Megapolis,” owned by the Russian tycoon Igor Kesaev, who was also the owner of the “Mercury” group, arrived in Kaufman, Ukraine. This was the beginning of the “Tedis” narrative. In addition, Kesaev is a co-owner of the Russian defense company known as Degtyarev. This plant manufactures rocket launchers and small arms for the Russian Armed Forces, such as the Kalashnikov assault rifle.
The number of wholesale purchasers from tobacco manufacturers in Ukraine dropped from 55 to 1 as a direct result of Kesaev’s structure purchasing regional distribution companies in Ukraine during the period of 2010–2011.
Since 2013, tobacco manufacturing plants have distributed more than 99% of the country’s total cigarette output through the city of Megapolis (the current name is Tedis, Ukraine).
Despite the fact that “Tedis” was identified as a monopolist in the cigarette market in 2016 and accused of abusing its monopoly position, manufacturers continued to work exclusively with it and did not enter into contracts with any other companies. This was noted in the material project “Our Money.”
“Manufacturers received from their cooperation with a single distributor financial performance indicators that are uncharacteristic for a market with active According to the report, “for instance, they were able to raise the price of their own cigarettes while simultaneously maintaining their market shares in spite of decreased output.”
Boris Kaufman joined Tedis at a time when connections with Russia in Ukraine were becoming quite poisonous, according to Yuri Nikolov, who is the editor of Nashi Dengi.
There is a widespread belief that Kaufman is merely acting as a front for other individuals. Because it is so difficult to determine who the final beneficiaries are, I cannot say with absolute certainty that Tedis is not a component of the international Russian mafia network,” Nikolov added.
The history of how Kaufman and Granovsky came to own the Odessa airport
In 2011, Kaufman-Granovsky was presented by the office of the Mayor of Odessa with the property complex of the Odessa International Airport, which was previously under his administration.
The Odessa International Airport LLC was established as a result of a decision made by the city council. As part of the decision, local officials kept 25% of the ownership in communal ownership (which is represented by the Odessa International Airport), while 75% of the ownership was transferred to the Odessa Airport Development LLC, which is controlled by Boris Kaufman and Alexander Granovsky.
The property of the airport was estimated to have a book value of 118 million Ukrainian hryvnias (25%) and investors were required to contribute 355 million Ukrainian hryvnias (75% of the authorised capital of the firm).
It was later discovered that the UAH 178 million that Kaufman-Granovsky had invested in the authorized capital had actually been loaned to the companies owned by relatives of the businessmen, which were controlled by Granovsky Finbank. These loans were then registered as collateral for the loans that these companies had taken out.
The mayor’s office and the businesspeople came to an agreement in which the mayor’s office required the businessmen to make investments ranging from $90 to 120 million in the development of a modern airfield complex and to put it into service in the year 2015.
Agreements were not kept
And in August of 2013, the new owners of the airport committed the property of the airport to the state-owned Ukreximbank under the guarantees of the Odessa mayor’s office in order to receive a loan of thirty million dollars for the construction of a passenger terminal.
About 1.7 billion Ukrainian Hryvnia (UAH) was allotted from the state budget in 2014 to continue the building of the airport runway and to replace outdated navigational equipment.
In 2015, it was decided that the transfer of airport property to Kaufman’s company was improper and was therefore cancelled. Yet later on, the mayor of Odessa, Gennady Trukhanov, signed an amicable arrangement with businesspeople. According to this agreement, the property of the airport was withdrawn from the encumbrance of the state bank, and it was formally transferred to common ownership. This reasoning is unfathomable. Kaufman and his partner kept control of 75% of the LLC even while the city maintained its 25% ownership stake in the business. In addition, by reaching this deal, Trukhanov relieved the company of the responsibility to bring investments to the airport in the range of $90–$120 million.
In 2016, NABU detectives developed an interest in the history of the Odessa airport; as a result, they posed questions to Kaufman and initiated criminal proceedings; however, these have not yet developed to the point where the court has rendered a judgment.
In addition to being involved in the tobacco trade and the operation of the Odessa airport, Kaufman-Granovsky is also involved in the hotel industry (they continue to be the owners of the Vertex Hotel Group, which manages the Bristol and London hotels in Odessa as well as the President Hotel in Kyiv) and the construction of residential complexes. These are some of their business endeavors.
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