Country for sale: Who's in charge at the Ukrainian security service

US flag on Ukrainian Security Service building shows who’s in charge

Ukraina.ru,

8 December, 2014

The US flag has been planted at the entrance to the main office of the Ukrainian Security Service The Security Service of Ukraine is flying the American flag ahead of the Central Intelligence Agency top officials’ arrival. This practice is alien to any other country in the world. 

Natsionalnaya Oborona magazine’s editor-in-chief, Igor Korotchenko, commented on the actions of the Ukrainian Security Service in an interview with our outlet. 

"Such practice is a sure sign of the Security Service’s partial loss of sovereignty. It’s known that the current director of the Ukrainian Security Service, Valentyn Nalyvaichenko, has been recruited by the US and acts as a direct agent of US intelligence, whose status has long been exposed and legalized," the expert said.Korotchenko also said that no country follows this practice. 


According to him, it has always been considered "in bad taste" to hang a foreign flag on the national intelligence building. In doing so, Ukraine is clearly showing that it does not control its security services.

"In general, the Ukrainian Security Service acts as a junior partner of US intelligence, and the CIA sets its tasks and priorities," said Korotchenko. 

I think this photo says it all: US State secretary Joe Biden in Kiev. the President of Ukraine.

Two years of typhoons bring in to stark relief how tenuous the global food supply has become.

With abrupt climate change we can expect production levels to crash because of extreme weather events and changing climate and droughts.

Mass starvation coming soon and people will only pay attention when it is white people dying sadly

--Kevin Hester

Desperate for revenue, government aims for big asset selloff soon

Kyiv Post,

5 December, 2014

Ukraine’s government is looking to sell state assets -- which collectively might produce up to 35 percent of the nation’s gross domestic product -- to boost an economy mired in recession.

“We are announcing the biggest privatization in 20 years,” said Prime Minister Arseniy Yatsenyuk. “I think any state-run companies, holdings and other trash … are ineffective. Their activity is focused on one thing - stealing the money that’s been received under state guarantees.”

Yatsenyuk’s predecessor under the regime of ousted President Viktor Yanukovych, Mykola Azarov, blocked sales of the biggest state-owned companies, like Naftogaz, an oil and gas monopoly.

In August, parliament made a step towards opening up privatization by allowing foreign companies to rent Ukraine’s gas transportation and storage system, probably the most interesting part of Naftogaz’s worth, estimated at up to $35 billion. But the gas sales part will only become interesting to investors when the state stops forcing Naftogaz to sell at subsidized prices.

Initially, privatization plans for this year were huge and included auctioning of 190 companies and 130 real estate properties. But most of them were never sold because Russia’s war made investors unwilling to buy anything in Ukraine. Therefore, the Cabinet’s intention to raise $1.8 billion through privatization fell ridiculously short – raising only $3.6 million as of early November.

However, the proposed sale list never included government-owned Ukreximbank and Oshchadbank, the country’s second and third biggest banks, respectively. It never included Ukrzaliznytsya, the railway monopoly, orUkrposhta, a postal service that’s losing its positions on the market due to the inability to catch up with the intensive growth of the e-commerce industry.

But some deals have already been completed, despite the drop in price for Ukrainian companies. The index of Ukrainian Exchange, the country’s major equity trade platform suffering from low liquidity, fell by 21 percent amid tension in the east after reaching this year high on July 30. Index reflects the price of Ukraine-based business assets.

On Nov. 25, the State Property Fund sold 25 percent stake in Zakarpattyaoblenergo, which owns three hydroelectric power plants in western Ukraine, to a group that has been traced to Yanukovych fomer ally and incumbent lawmaker Sergiy Lyovochkin, for some $15.9 million. Dnipropetrovsk governor Igor Kolomoisky’s Business Invest lost an auction competition to Favoryt, a financial company in Kyiv that is believed to be a part of Lyovochkin’s joint business with other partners.

Denys Sakva, an energy analyst with Dragon Capital, an investment house in Kyiv, said it’s a good price for a 25 percent stake. He said the price rose because of true competition. “Previously, we hadn’t noticed much of it (competition).”

Later, an agency in charge of state property sold 25 percent stakes in Vinnytsyaoblenergo for $7 million and in Chernivtsioblenergo for $2.3 million.

However, these deals are a prelude to distributing more lucrative assets.

The government is preparing to sell its control over Ukrnafta, a gas and oil producing unit of Naftogaz. Kolomoisky holds a minor stake here which means he will do his best to turn it into a major stake. Ukrnafta has been a huge inspiration for the shareholders this year after it paid off very generous dividends, providing a 20 percent return on investments.

Control over Centrenergo, a profitable and major electricity maker, will also be sold through an auction, while 10 percent of the shares will be placed on the stock market with a the starting price of $16.1 million.

Centrenergo was at epicenter of a scandal recently.

On Nov. 25, the General Prosecutor’s Office reported the arrest of one of the company’s top executives who is suspected of running a corruption ring, receiving bribes, up to $55,000 a day, from the suppliers who paid for the right to sell their goods to the power producing company. As much as Hr 2 million and $300,000 in cash, along with fake stamps and documents, were found during a search of company’s office in Kyiv.

Donbasenergo, another profitable power producer, is for sale too: investors will be able to buy up to 25 percent with a $17.6 initial price in the company controlled by Igor Gumenyuk, whose ties with Yanukovych are viewed as a proven fact by the stock market traders. However, a war in the Donbas, where company is located, may push the price down.

But privatization is not only offering up energy firms.

Odesa Portside Plant and Sumykhimprom, two chemical giants, are also up for sale. Both are reasons for sleepless nights for Kolomoisky and his key rival, billionaire Dmytro Firtash who is currently living in Austria and fighting U.S. bribery charges. Each wants to develop the chemical part of his business empire.

Turboatom, a maker of nuclear energy equipment, is another interesting asset for the investors to grab. However, it’s been on the privatization agenda for a long time, but the government has decided to hold onto it and its profits.

Mariupol-based Azovmash, which produces machinery for iron ore extraction, might go to private hands too, but, again, the war in the east may prompt the property fund to postpone its sale.

Yatsenyuk promised to offer spirit producer Ukrspyrt, another government-owned monopoly, to those who would be interested, but it has not made it to the privatization list.

Foreign investors could play a special role during the upcoming wave of privatization. Previously, they have been pushed out of the auctions through the introduction of various requirements that made little sense.

However, Yatsenyuk doubts that foreign companies or investors will buy anything this time. Their disappointment with Ukraine’s economy is too high, he thinks.