Interviews and articles

17.08.2005

Interview: Citizen multi-millionaire

Victor Pinchuk is talking about new power, about relationship with his farther-in-law, and in general about project with Steven Spielberg

V.Pinchuk is one of the wealthiest people in Ukraine, a son-in-law of the former president Kuchma, businessman and a MP. He doesn't give interviews for Ukrainian and Russian media. Victor prefers to communicate with the foreign media, making an image of the public figure of European level.

Last year, exclusively due to V.P. efforts, Ukraine was visited by Jeorge Soros and George Bush- senior. Jointly with Spielberg, Pinchuk has launched a documentary on Holocaust in Ukraine. He communicated with the Westerners without an interpreter.

He coolly bears a title of a son-in-law of Ukraine's ex-president Leonid Kuchma and doesnt keep in secret the fact of being very rich. In the Top 50 wealthiest men rating in Central and Eastern Europe , according to PROST, a polish magazine, he was ranked 10 last year. Prost assessed his fortune in $2,5 billion.

This interview was given in his office in Horizon Tower, in the center of Kiev. He spoke of his plans and hopes for the future. However he answered reluctantly the questions concerning policy and his business.

- Recently, Petro Poroshenko, Security Council secretary, has estimated your joint property with L.Kuchma in S7-8 bil., while Prost indicated $2,5 bil. Which figure is correct?

- I'd like one of "Our Ukraine" leader to tell the truth. One always wants the figure to be bigger. (smiling).
Speaking about L.Kuchma, he has no fortune. As for the fortunes assessments of Ukrainian businessman, we don't have a criterion. We don't have the market which is capable to make this kind of estimation. We may just say: If the plant were in the U.S., it would cost this much - there are different risks there and they affect the price.

One journalist has recently presented me with a Prost magazine, and I've read it for the first time. In particular, it said that I made my fortune due to my constituency (electorate) which Kuchma gave me as a wedding gift. It's both funny and sad. I know what fight I had with Pavlo Lazarenko who was an informal master of Dnipropetrovs'k region at that time. And I won. And I know how much that victory cost. When such silly things are published, they cause the same attitude.

- And yourself, how do you estimate your fortune?

Only tentatively. In case, for, instance, I'm going to sell something, and it would be bought, I could say: it's turned out to cost so much and so much. But all this reasoning is theoretical.

- What is your attitude to be referred as to oligarch?

With irony. To tell seriously, an oligarch is a person who combines policy and business in himself and uses the political influence for hitting his business targets. And I don't feel ashamed to declare that I was the first or may be one of the first in this country who declared one year ago: business and policy should be divided. It's a big problem for the country which contains above hundred businessmen in its Parliament. It's impossible to share in one head if you vote for your private business interest or for your country's interest. One must break this system. But I'd like to stress: now the responsibility for creating conditions for businessmen to prevent them from engagement into the policy. . lies on the authorities.

- And are the businessmen themselves ready for this?

- Yes, they were ready long time ago. But the authority must say: we guarantee you - here are understandable transparent laws, and there will be no treats and "flying visits' from fiscal bodies, fire-brigade inspection, and no governors' will demand from you something. You won't need to go to your "roof" in the region administration or city or in Verkhovna Rada. You are welcome to make business and I, the authority, will protect your interests.

 - You've announced that you would not run for the MP in 2006, provided the new authorities will ensure the fair and transparent work on the market. You haven't changed you mind?

No, I haven't, if only.. .Actually, there are a great number of "ifs". In this terms, the big business and the authorities have the same risks. Now the witch-hunt has started and in a short- term it might bring some success somewhere. But it won't last for a long time. If the fight starts, naturally, the resistance will appear, and the effort won't be added but deducted. It's more profitable to unite the efforts of the authorities with those of business for the country's sake.

- Do you often see your father-in-law lately? Do you have many common topics for discussion?

- Now almost every evening we visit them. We speak of our family, his foundation, his granddaughter Katya. He is in good mood. From Davos we've brought him many regards. We met various people, politicians, his colleagues- heads of the countries. Their assessments of his actions during the political crisis are very high. They understand what difficult decisions he made. The very fact that there was no bloodshed, though he was pressed to introduce the state of emergency, means a lot. Realizing all the possible consequences of it, he didn't allow this violent scenario. He was managing this country for a decade not to leave it in isolation or in blood. One needs to give due to the Western politicians who appreciate it very much because they know the colleagues in some parts of the world who would act in a different way.

- What changes is businessman Pinchuk faced with the new authorities coming?

- I greet any changes within the rule of laws. We, the big business, - are adherents to the new authorities as our values are the same - rule of laws, transparency, democracy. Open society. We want to feel ourselves the law-abiding citizens, to pay large taxes, to work transparently, we want to carry a social responsibility for many things in our country - these are business requirements.

-Are you ready together with Renat Akhmetov again to participate in the Krivorozhstal privatization tender or to pay some additional millions of dollars in case of need?

- We are ready to accept any decision of the court. But we also hope that Ukraine's president will also accept any decision even if it doesn't coincide with his own views.

- Why do you think the issue on privatization was risen just in connection with Krivorozhstal. For the last years there were many other privatizations?

- I'm sure that it is connected with the names of Renat Akhmetov and Victor Pinchuk. We paid for Krivorozhstal twice more than for the rest of metallurgical plants taken together. Therefore. to put it mildly, it is not precisely to say that the price was not adequate. I consider it as a political trick which was used during presidential campaign. But now it's time to come back to realities. If I was running for the president post, maybe, I'd tell much more,. And now the authority, jointly with the business, should build the country up and for the sake of this main goal, one must always find compromises.

I'd like to underline that for us, me and Renat Akhmetov, the reputation of honest businessmen and Ukraine's patriots in the world and in the country is very important.

- In the TV circles it's usual practice to name the channels you own (STB, ICTV, New, Ml) as a media holding. You are not going to make it legal?

- I cannot think it's possible to set up a materialized holding under the current legislation of Ukraine. And we should observe the law. There is a company which gives some consulting services on the correct actions to prevent the channels from cannibalism, to prevent one holding from competing the other one.

- Some groups of channels are interested in being united for purchasing the product - in this case it will be cheaper. Uniting the efforts it would be more successful to sell advertisements, saving with news production, i.e. to make own production.

 - And what about antimonopoly legislation? You aren't afraid that the new authorities will blame you for you monopolistic position on the TV market?

- We don't break any law. Antimonopoly legislation says that a share on the TV market should not exceed 35%. But unfortunately, we possess considerably less - about 30%.

-   Is there a manager of the conditional media holding?

- A conditional one - Sasha Boghutsky.

-   But he states that there's no holding and he doesn't exist as a holding manager.

- You say "conditional" and I'm giving you a corresponding reply.

- Is it right that you're going to sell one of your channels? Or someone is spreading these rumors on purpose?

- There are many people who'd like to buy the. We don't plan to sell, still, a business must be always ready to face the situation when he can sell even his favorite business. Business exists fir the purpose to increase its cost, and sometimes there's a price which exceeds the market one. Then, it's silly not to sell. But we are not going to sell anything, we want to invest.


Now there are many chances for appearing the tendency towards price rise for the Ukrainian property, when the Ukrainian assets capitalization becomes higher. Let a western investor come and we'll sell im not for a kopek but for a ruble. I believe that there will be an investment boom - this is a young country and the investors expectations are tremendous. I'm feeling this.


I'm asked by many: do you have anything for sale? Sell us something. Serious western investment institutes affirm that they'd come with pleasure to one or another sector of our economy. They are waiting, of course, to what extend the decisions to be taken by the new authorities will be legal and transparent. They liked very much Ukrainian president's message: save money on bribes. They hope it will be the case. But they have already heard such things in many other countries but only a few have succeeded in it.

- From the outstanding businessman' point of view, what are the advantages and the risks of Ukraine integration to EU?

- Are you worrying what will be in 15 years?

- Why in 15 years? New power promises that we will be in EU in 5 years.

- I have been in Davos. And have had the lunch with Mr. Joze Barrozu, the chairman of European Commission, during this lunch also some people have been presented, among them the son of the President of Egypt Gamal Mubarak was present too. He made a question about the future of Egypt and EU. Barrozu was speaking highly about the relationship between EU and such countries as Egypt, Morocco, Byelorussia, Russia, Ukraine, that it's important to build good-neighbor relations with them. But I want simply to attract your attention, that we have not any illusion: now Ukraine is located in "one basket" with Morocco. Unfortunately, in such way we are considered by EU and, unfortunately, we have such perspectives.

I welcome that in present the fast integration tasks have been putting. Perhaps, we will walk this road very fast. But to believe that it will be so fast - it's too much. Simply, I told what I had heard. We should take to account that it's not only the personal position of Barrozu. May be it's position of the heads of almost 25 countries of European Union or certainly such position has been held by some the most powerful countries.

Let's hope that EU copes with the new 10 countries, and after successfully will negotiate with Turkey. But from my point of view, like the citizen of Ukraine: Odessa, Lvov or Kiev are more European cities than Istanbul. But to cope with more than 50 millions of people, with our problems, with unclear political situation, with our disunity - it's very difficult. Many things are up to our Ukrainian politics-makers - what will be send to European society within the next few months.

- What stage is the work on a documentary about Babiy Yar tragedy passing now, a film which you co-produce with Steven Spielberg? Have you already signed a contract?

- In December, within the framework of Shoah (Shoah Foundation - is Spielberg's Foundation which is collecting materials and producing films on Holocaust) everything was signed. We also agreed that, naturally, they will be in charge of a creative part of the contract. He says this subject is very important for him and he will be an executive producer provided I'm an executive producer, too. They will recruit the staff. Though, of course, they'll be interested in the Ukrainian partners in the field. I don't put forward any terms. One of these days we'll have a meeting and discuss it.

- What is a plot of the documentary?

- I won't tell this. Anyway, budget for a documentary has nothing in common with budget for a movie.

- How much does your share make up?

- There are no shares - I'm funding this film.

- When will your enthusiasm for modern arts result in the museum you used to mention very often?

- We've made up a very good collection. We have succeeded in bringing back to Ukraine the rare pictures of our best painters that were taken abroad. But our goal is of larger scale: a museum which will contain both Ukrainian and European painters' works. After the orange revolution there's nothing better then museum could demonstrate our contemporaneity and Europeaness.
Last summer we won the Ministry of culture's tender on the right to set up a museum in one of the premises of Arsenal plant. Now one needs the authorities' further steps in this property transferring. (In February 8, the president suggested the Kiev municipal council and the Kiev city administration to design the idea of the National Hermitage that could be located in the Arsenal premises. Victor Yuschenko plans to place there some exhibits kept in the store-rooms of Ukrainian museums). That is the state from its side includes into its plan a building, and we - money, which means millions dollars to be spend for this building reconstruction. It is in an awful state and we cannot just paint it. We need to do with it something which will become a proud of Ukraine and pearl of Europe.

For me it's like football for someone- not less interesting and very thrilling. I'm ready to invest big money into this project.
Source: "Korrespondent", 17 August 2006
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