Originally published by Kyiv Post.
"Kyiv-London". From Ukraine With Cash’ – a hard-hitting documentary about the London luxury homes of Ukrainian oligarchs – for your money. MYMEDIA and our investigative fund Objective are proud to have supported this documentary film.
LONDON – Knightsbridge, Kensington and Chelsea are the most desired destinations for ultra-rich homebuyers from around the world, and Ukraine’s oligarchs are no exceptions. House prices here are anything north of $2.2 million.
The influx of foreign cash – often of dubious origin – this year has forced the British government to consider tightening property-buying regulations and banning shell companies from offshore havens that hide real owners.
Ukraine’s richest man, Rinat Akhmetov bought the most expensive apartment in London in 2011, at One Hyde Park for roughly $200 million. According to a range of reports in the British media, Akhmetov’s London abode is a fortress, complete with bulletproof windows and a panic room where he and his family can retreat should an emergency arise.
The residential complex is guarded by former marines, and they don’t welcome visitors. On a recent day in November, a journalist from Radio Free Europe/Radio Liberty visited the residence, and was stopped by a guard.
“Unfortunately, I cannot give you any information about anything. Moreover, I have to ask you to leave the premises. Unfortunately,” the guard said.
From the windows of his apartment, Akhmetov can enjoy the nightly march of the Royal Guard of Honor. And should he ever grow lonely, there are at least a couple of oligarchs available nearby to drop by for a cup of tea.
For example, it seems that fellow countryman and chemicals tycoon Dmytro Firtash considers Britain as his second home because he bought a lot of property there over the past few years, including an old subway station.
Firtash has even featured in a parliamentary hearing last year because he has paid money to high-ranking British politicians. His press service declined requests for comment for this report.
“Mr. Firtash is estimated to be worth between $600 million and $5 billion. He has been linked to (Ukrainian) President (Viktor) Yanukovych and even to President (Vladimir) Putin. I was therefore extremely concerned to receive emails from human rights activists in Ukraine who claimed that British parliamentarians had received money from Dmytro Firtash, a major Ukrainian oligarch,” Helen Goodman, a member of parliament, said during the March 2014 parliamentary hearing.
“I still think that there are questions to be answered about whether the money which was given by Mr. Firtash and his friends was buying access and... was buying influence,” Goodman told RFE/RL.
Oliver Bullough, a British journalist and author who specializes in corruption issues in the former Soviet Union, discovered earlier this year that Firtash splashed out on a range of properties in London. Bullough was flipping through a phone book and stumbled upon the name of Firtash’s Russian-born wife, Lada, listed as the owner of a flat in Knightsbridge, close to Harrods, the luxury shopping mall.
Bullough assumed that the flat was for personnel located close to a bigger property – and he found it. It was a new property worth roughly $90 million, developed by luxury real estate dealer Michael Spink.
According to the real estate register, Firtash’s house has five stories, two of which are underground. It has a swimming pool, a gym, a conference room and at least four bedrooms. The deal was completed in December 2012.
Just days after the EuroMaidan Revolution, Firtash made another colossal acquisition on Feb. 27, 2014. He bought the building of a former metro station, Brompton Road, which has been out of use since 1934.
During World War II, Britain’s Defense Ministry bought the property for $33,000, and it served as a bomb shelter for a short while. In 2013, the ministry decided to sell it, and Firtash bought it just before being arrested in Vienna in March 2014 at the request of the FBI, which suspected him of bribery. Consequently, Firtash spent about a year under house arrest until an Austrian court decided that the U.S. Justice Department failed to provide enough evidence for his extradition to America.
Emma Grubb, a spokeswoman for the UK’s Ministry of Defense, said in a statement: “206 Brompton Road was sold on the open market through appointed agents to the highest bidder. Appropriate checks were carried out by the marketing agents and the buyer was represented by a reputable UK law firm. We are not able to give details of unsuccessful bidders or their offers. The sale of the property conformed to strict guidelines set out by the Treasury.”
Firtash paid roughly $80 million.
“It’s all about not necessarily buying property and living here,” explains British journalist and author Mark Hollingsworth, who wrote about foreign tycoons in his book Londongrad. “It’s more about parking their money. They want to move their money out of Russia or Ukraine or Kazakhstan or wherever and put it in a safe place.”
This sort of investment has driven up prices in some neighborhoods.
Wesley Davis, a financier and member of the board of directors at Asia-Pacific Investment Partnership, used to live in Ennismore Gardens in South-West London. He said the place was family-oriented for a long time, but then the families got priced out.
“We started seeing a lot of high-net-worth individuals from overseas moving into the area, buying flats, buying multiple flats and joining them together… They were buying them as their second and third, fourth, fifth residences. So, they are not really living in the area,” he says, pointing out empty parking spaces around, which is very unusual for London.
Just a short distance away from Davis’ former residence, in Wycombe Square, sits a pretty residential complex of 19 homes. Ukrainian political consultant Vladimir Granovsky is the owner of house No. 4. In his comments through Facebook messenger, he said he lives in Germany, not England, and continues to do political consultancy.Another Ukrainian who has a London address is Olga Kaletnyk. Her official home is located just a couple of blocks away from Akhmetov’s – at 199 Knightsbridge Apartments, but is owned by an offshore company in the British Virgin Islands. The Kaletnyks are a prominent political family in Ukraine. Olga is the sister of the former Communist Party parliament member Oksana Kaletnyk, and the cousin of Igor Kaletnyk, who headed customs during Yanukovych’s presidency. Olga is also the niece of another former lawmaker, former Party of Regions member Hryhoriy Kaletnyk.
Officially Olga Kaletnyk designs clothes under the Ellion label. Her company refused to comment about the luxury property.
Hollingsworth says that Russian and Ukrainian oligarchs like to buy property in areas like Belgravia, Knightsbridge and Kensington for two reasons.
“One is that they can show off to their friends and families – look I’ve got a big house in Knightsbridge or in One Hyde Park. And then, secondly, because it’s a good investment,” Hollingsworth says. “When Russian and Ukrainian billionaires come to London, they have a very romanticized view of London, they like sort of old-fashioned places. They will go to very old-fashioned restaurants, dress up very English clothes.”
In his book, Hollingsworth wrote a lot about Victor Pinchuk, a pipes and media tycoon who also owns a luxury home in London. Located at 17 Upper Phillimore Gardens, Kensington, it’s an area of luxury villas. Pinchuk spent roughly $120 million on a four-story Victorian villa in 2008. At the time, it was the equivalent of Hr 1 billion.
The house is officially owned by an offshore company which walls off the real beneficiary owner, but Pinchuk’s EastOne holding stated that the property is theirs.
“The purchase of this real estate in London was an investment under the mandate of investment and consulting company EastOne, founded by Victor Pinchuk. The purchase was declared in 2008. We would also like to draw your attention to the fact that on Jan. 30, 2008, shortly before the real estate deal in London, EastOne announced the conclusion of a deal to sell 94.2 percent of shares of UkrSotsbank,” Pinchuk’s holding said in a statement.
Hollingsworth said that the money spent on property is frequently technically clean, but earned “because of connections and manipulations.” Pinchuk is the son-in-law of former President Leonid Kuchma and acquired valuable assets during his presidency.
Meanwhile, a campaign has been under way in London against the ghost owners of luxury apartments since Britain’s independent Channel 4 broadcast a documentary in July called “From Russia with Cash.” In the documentary, two undercover journalists – including Natalie Sedletska from RFE/RL – talked to real estate agents pretending to be a corrupt Russian official and his lover.
They said they wanted to buy a luxury home in London with cash stolen from the Russian budget. All of the agents agreed to help.
The documentary added fuel to a campaign against foreign money parking in London. “There is no place for dirty money in Britain,” said British Prime Minister David Cameron in the wake of the broadcast.
Rachel Davies, a senior advocacy manager at Transparency International UK, said: “We don’t want any foreign company to be able to complete a purchase of the UK property without having told the authorities who they really are. Before buying a property they actually have to say who the real beneficial owner really is. And of course some of them will lie – but at least then they will be breaking the rules.”
Editor's Note: This report was produced by the investigative unit of Radio Free Europe/Radio Liberty's Ukrainian service with the support of SCOOP, a network for investigative journalists in Eastern Europe, Russia, Caucasus, Central Asia and West Africa, and the Objective investigative reporting project. The Ukrainian video version of this report is at radiosvoboda.org. The prices were converted from British pounds to U.S. dollars at today's exchange rates, not from the time of purchases.