KIEV, Ukraine -- Ukraine plans to sell bonds denominated in Russian rubles and doesn’t need to restart a $15.6 billion International Monetary Fund loan to make debt payments, said an adviser to President Viktor Yanukovych.
The former Soviet state wants to raise 98 billion hryvnia ($12 billion) this year, two thirds of which will probably be bought domestically, Iryna Akimova, the first deputy chief of Yanukovych’s staff, said in an interview yesterday.
The Finance Ministry has regularly sold bonds denominated dollars and euros in the domestic market after delaying a $1.5 billion Eurobond offering planned for March.
“The government has already made some successful attempts on the domestic market,” Akimova said in Washington.
“Now they’re working on government bonds denominated in rubles to use in the Russian market and there are rather good perspectives.”
Ukraine, whose IMF program was frozen last March after the government refused to raise domestic natural-gas prices to trim the budget deficit, faces 42.27 billion hryvnia ($5.19 billion) in foreign debt payments in 2012.
To bolster state coffers, it is negotiating with Russia to lower the price it pays for the fuel by a third, which would cut losses at state energy company NAK Naftogaz.
A rally in Ukraine’s dollar-denominated bonds due in 2021 cut yields 20 basis points, or 0.20 percentage point today, to 10.02 percent, compared with 10.49 percent on March 30, which was the highest in more than two months.
The cost of insuring Ukrainian government debt against non- payment for five years using credit-default swaps was 839 basis points yesterday, down from a two-month high of 857 on March 30, according to data provider CMA, which is owned by CME Group Inc. and compiles prices quoted by dealers in the privately negotiated market.
A basis point is 0.01 percentage point.
Household gas prices are “a serious, serious issue” and tariffs “should come closer to the market-oriented level,” Akimova said, predicting some increases toward year-end.
“On what scale, we’ll see.”
Yanukovych’s Party of Regions, which has lost support in opinion polls, faces parliamentary elections in October.
Ukraine is seeking to pay about $250 per thousand cubic meters of Russian gas, compared with $416 last quarter, and wants to boost transit volumes through its pipelines to Europe after its neighbor began rerouting some supplies through the Nord Stream pipeline and via another link across Belarus.
In return, Russia is seeking a stake in Ukraine’s transit pipelines.
It also wants Yanukovych to sign up to a Customs Union it created with Belarus and Kazakhstan.
Ukraine has said joining the union would harm its chances of signing an Association Agreement, including a free-trade pact, with the European Union.
The policies used by Russia are aimed at applying “political pressure” on Ukraine, according to Akimova, who says the country opposes joining the Customs Union.
“Energy issues are always very politicized.”
The economy needs 27 billion cubic meters of gas in 2012, about half the 52 billion it’s contractually obliged to purchase, according to Akimova.
“The current gas agreement is unfair both in terms of price and volumes,” she said.
Ukraine is seeking to roll over a $2 billion loan from Russian lender VTB Group (VTBR) that matures in June, Akimova said, adding that the nation may seek further financing from other Russian banks.
Economic growth in Ukraine will probably slow to 3 percent this year, below a 3.9 percent government forecast, because of weaker global demand for exports such as steel, said Akimova, who’s in charge of economic programs and represents Yanukovych in the Cabinet.
Gross domestic product rose 5.2 percent in 2011.
Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts
Saturday, 7 April 2012
National Bank of Ukraine Invests In IBM's Smarter Computing Approach To IT
KIEV, Ukraine -- IBM announced today that the National Bank of Ukraine has adopted IBM's smarter computing approach to IT to help simplify the management and protection of billions of financial records across Ukraine.
As part of the agreement, IBM will help the financial institution store, back up and process more than 16 terabytes (TB) of information.
As the Ukrainian financial services industry expands, the need for fast, secure and reliable banking is growing ever more critical.
Currently the National Bank of Ukraine is providing financial guidance to more than 176 banks, representing more than 125 million personal and corporate financial accounts.
To address this rapid growth and the increasing need to provide fluid, uninterrupted transaction flow throughout the country's entire banking system, the National Bank of Ukraine decided to start at the heart of the matter, where the data resides – storage.
"We realized that if we wanted to dramatically reduce the potential impact of an IT disaster, while fulfilling international banking regulations, keeping our clients happy and our expenses under control, we had to start innovating at the heart of the process – where the financial data was being stored," said Oleksii Bilash, head of the IT department at the National Bank of Ukraine.
"That is why we opted for a system capable to handle the growing flow of incoming data in a fast, reliable and secure way. The IBM solution outperformed other offerings in four key criteria: performance, fault tolerance, quick recovery and total cost of ownership."
Under the agreement signed let year, IBM and its Business Partner Integrity Vision LLC installed 16 TB of new storage disk space and server virtualization.
A comprehensive storage platform based on two connected IBM System Storage DS8800 systems was established.
IBM System Storage DS8800 capabilities, such as the IBM System Storage Easy Tier technology, help optimize system efficiency by automatically placing data at the most strategic storage level.
For example, more commonly used data is automatically and dynamically placed on solid state drives (SSD) for fast access, while less frequently accessed data is placed on more cost-effective storage systems – all without disruption to applications.
With the new solution in place, performance has improved, costs have lowered, and the bank's window for full backups has decreased twofold.
"IBM relies on the best teams, deep industry insight and first-hand experience in implementing financial solutions and improving IT security and compliance for organizations worldwide," said Penko Dinev, Country General Manager, IBM Ukraine.
"The new storage platform for the National Bank of Ukraine is scalable and can easily accommodate the bank's future needs in terms of data storage or implementing new analytical approaches that will help the bank turn the stored data into financial insight."
The agreement between IBM and The National Bank of Ukraine is the latest in a string of smarter computing adoptions from financial institutions across Central and Eastern Europe (CEE), the Middle East and Africa, as banks look to improve operational efficiency and benefit from recent advances in enterprise and cloud technologies.
As part of the agreement, IBM will help the financial institution store, back up and process more than 16 terabytes (TB) of information.
As the Ukrainian financial services industry expands, the need for fast, secure and reliable banking is growing ever more critical.
Currently the National Bank of Ukraine is providing financial guidance to more than 176 banks, representing more than 125 million personal and corporate financial accounts.
To address this rapid growth and the increasing need to provide fluid, uninterrupted transaction flow throughout the country's entire banking system, the National Bank of Ukraine decided to start at the heart of the matter, where the data resides – storage.
"We realized that if we wanted to dramatically reduce the potential impact of an IT disaster, while fulfilling international banking regulations, keeping our clients happy and our expenses under control, we had to start innovating at the heart of the process – where the financial data was being stored," said Oleksii Bilash, head of the IT department at the National Bank of Ukraine.
"That is why we opted for a system capable to handle the growing flow of incoming data in a fast, reliable and secure way. The IBM solution outperformed other offerings in four key criteria: performance, fault tolerance, quick recovery and total cost of ownership."
Under the agreement signed let year, IBM and its Business Partner Integrity Vision LLC installed 16 TB of new storage disk space and server virtualization.
A comprehensive storage platform based on two connected IBM System Storage DS8800 systems was established.
IBM System Storage DS8800 capabilities, such as the IBM System Storage Easy Tier technology, help optimize system efficiency by automatically placing data at the most strategic storage level.
For example, more commonly used data is automatically and dynamically placed on solid state drives (SSD) for fast access, while less frequently accessed data is placed on more cost-effective storage systems – all without disruption to applications.
With the new solution in place, performance has improved, costs have lowered, and the bank's window for full backups has decreased twofold.
"IBM relies on the best teams, deep industry insight and first-hand experience in implementing financial solutions and improving IT security and compliance for organizations worldwide," said Penko Dinev, Country General Manager, IBM Ukraine.
"The new storage platform for the National Bank of Ukraine is scalable and can easily accommodate the bank's future needs in terms of data storage or implementing new analytical approaches that will help the bank turn the stored data into financial insight."
The agreement between IBM and The National Bank of Ukraine is the latest in a string of smarter computing adoptions from financial institutions across Central and Eastern Europe (CEE), the Middle East and Africa, as banks look to improve operational efficiency and benefit from recent advances in enterprise and cloud technologies.
Saturday, 18 February 2012
Audit Chamber head says Putin’s proposed privatization fee is doable
The head of the Audit Chamber, Sergei Stepashin, says he knows how to calculate what the so-called oligarchs still owe the state after the controversial and murky privatization of the 1990s.
Last week at a meeting with the Russian Union of Industrialists and Entrepreneurs, Prime Minster Vladimir Putin called the privatizations’ results “unfair.”
“Of course, this page must be turned. We must end this period, there are different options being offered, of course, we must discuss it with experts. But it must be done in such a way that society will accept the closing of this problem from the 1990s, of the, let’s just say it, unfair privatization,”
Putin proposed a one-off payment to compensate for their dubious gains, in a proposal that resembled Britain’s 1997 Windfall Tax.
“It must be either a one-time fee, or something else. We must think about it together. I think in the first place, society in general and entrepreneurs are interested in this.”
Stepashin said in an interview said today that while difficult, it would not be impossible to determine who owes what.
“In principle, one can calculate the difference in the price of those assets – from what they were purchased in the ’90s and what they were actually worth. But I must warn you, to do it will be difficult. If there is a need, we can solve the issue through legal procedures, bring in independent financial supervisors, including the Audit Chamber.”
“I recall that in 2003, the Audit Chamber finished its study of Russia’s privatizations in the 1990s,” Stepashin said. “Analyzing the results of the privatizations, we openly and honestly said that it ‘was conducted the worst possible way out of all European countries.’ This I quote verbatim from a member of the expert group, which worked together with the Audit Chamber, the Nobel laureate Joseph Stiglitz, an American professor. He is impartial, he grew up in a market economy. In not one country in the world, including Eastern European countries – Poland, Hungary, Czech Republic, Slovakia, I am already not taking into account China, Vietnam -- was this kind of privatization carried out.”
Last week at a meeting with the Russian Union of Industrialists and Entrepreneurs, Prime Minster Vladimir Putin called the privatizations’ results “unfair.”
“Of course, this page must be turned. We must end this period, there are different options being offered, of course, we must discuss it with experts. But it must be done in such a way that society will accept the closing of this problem from the 1990s, of the, let’s just say it, unfair privatization,”
Putin proposed a one-off payment to compensate for their dubious gains, in a proposal that resembled Britain’s 1997 Windfall Tax.
“It must be either a one-time fee, or something else. We must think about it together. I think in the first place, society in general and entrepreneurs are interested in this.”
Stepashin said in an interview said today that while difficult, it would not be impossible to determine who owes what.
“In principle, one can calculate the difference in the price of those assets – from what they were purchased in the ’90s and what they were actually worth. But I must warn you, to do it will be difficult. If there is a need, we can solve the issue through legal procedures, bring in independent financial supervisors, including the Audit Chamber.”
“I recall that in 2003, the Audit Chamber finished its study of Russia’s privatizations in the 1990s,” Stepashin said. “Analyzing the results of the privatizations, we openly and honestly said that it ‘was conducted the worst possible way out of all European countries.’ This I quote verbatim from a member of the expert group, which worked together with the Audit Chamber, the Nobel laureate Joseph Stiglitz, an American professor. He is impartial, he grew up in a market economy. In not one country in the world, including Eastern European countries – Poland, Hungary, Czech Republic, Slovakia, I am already not taking into account China, Vietnam -- was this kind of privatization carried out.”
Sunday, 27 November 2011
IMF very sad of losing Russia as its prey
IMF's Managing Director Christine Lagarde urged the Russian administration not to increase the public spending. Lagarde said that she was giving only friendly pieces of advice to Russia and added that she had received the Order of Friendship from the Russian administration.
According to her, public spending was not a very healthy phenomenon, especially before the elections. However, it is clear that Lagarde was not talking about the spending connected with the elections only. The IMF's chairwoman does not like the payments to weakly protected layers of the population, the increase of spending on defense and law-enforcement bodies. Aside from that, Christine Lagarde is concerned about the fundamental reorganization of Russia's entire road infrastructure.
Before the Managing Director of the International Fund released her statements, President Medvedev signed the law about raising monetary allowances to military men by 2.5 or 3 times. The law also raised military pensions by 1.5-1.7 times.
Prime Minister Vladimir Putin stated earlier that the government would delay the increase of tariffs of natural monopolies, except for RZD (Russian Railways). The tariff increase has thus been postponed from January till July 2012. He also said that the tariffs on electricity would be indexed on the level of the inflation rate. The governmental committee for budget projects later decided that the tariffs of natural monopolies would be raised not higher than the inflation rate - by 6 percent in 2012 that is. Tariffs on natural gas became an exception: the prices on this fuel will grow by 15 percent from July 2012.
In addition, Putin said on November 8 that the Russian government was intended to double the volume of transport construction in ten years. As many as 8 trillion rubles will be assigned for the purpose before 2020, Putin said.
It is an open secret that the intentions of the Russian administration to invest in the development of the country, its social sphere, the transport infrastructure and the defense power has traditionally evoked rejection among such international monetary centers as the IMF.
Last year, the IMF addressed to the Russian government with a whole list of recipes. The recipes looked like those the Fund gave Russia during the 1990s. Those recipes became mandatory instructions for the governments of Gaidar and Chernomyrdin.
The set of recipes was standard. It included privatization (natural monopolies inclusive), the minimization and even liquidation of public spending on social purposes. It also included cuts of the funding of the armed forces and other state bodies, including law-enforcement agencies. In return, Russia received modest handouts from the IMF to buy food from Western countries, to liquidate defense enterprises, to destroy coal mines, etc. The recipes from the IMF took Russia to the default in 1998, which automatically ended the "fruitful cooperation" with the fund.
Strange as it may seem, Russia began to recover after that. The IMF could not be happy with that, of course. The Fund became concerned with Russia stepping aside from the "basic principles." IMF officials started saying that Russia had no strategy to scrap the measures taken to support the economy.
To put it otherwise, supporting the national economy is not a correct thing to do from the IMF's point of view. In addition, the fund recommended Russia should intensify the reforms in the field of state funding.
The reforms imply an opportunity to considerably decrease state spending in the field of healthcare and social maintenance. According to IMF's experts, the pension system of Russia will not be viable without those reforms, which particularly include the gradual increase of the retirement age (pensions for the dead, so to speak).
Christine Lagarde said during her visit to Moscow that Russia would rather need to recreate its reserves instead of investing in expensive projects while oil prices remain on a high level. It goes about the replenishment of the Reserve Fund and the National Welfare Fund.
Sunday, 20 November 2011
Ukraine Central Bank Says Demand For Currency Falls In October
KIEV, Ukraine -- Ukrainians’ average daily demand for foreign currency declined 34.6 percent on the interbank market in October compared with the previous month, the central bank said.
Cash demand for foreign currency fell 29.5 percent, the Kiev-based central bank said in a statement on its website today.
The Natsionalnyi Bank Ukrainy controls the hryvnia’s exchange rate by buying and selling dollars on the interbank market. Ukraine’s international currency reserves declined in October to $34.16 billion from $34.95 billion a month earlier and $38.2 billion in August, according to the central bank.
The central bank spent $1.5 billion of its reserves in October, 24.9 percent less than a month earlier, according to today’s statement.
The Natsionalnyi Bank Ukrainy controls the hryvnia’s exchange rate by buying and selling dollars on the interbank market. Ukraine’s international currency reserves declined in October to $34.16 billion from $34.95 billion a month earlier and $38.2 billion in August, according to the central bank.
The central bank spent $1.5 billion of its reserves in October, 24.9 percent less than a month earlier, according to today’s statement.
Sunday, 23 October 2011
50 percent of Russians own a bank account
Over the last three years the number of Russians who have a bank account has grown from 37 percent to 52 percent of the population.
The number of citizens with bank cards of one form or another has grown from 30 percent to 40 percent of the population, Interfax reported, citing research from the Levada public opinion research center.
A further 14 percent said they planned to open a bank account, while 13 percent planned to acquire a bank card.
Sunday, 9 October 2011
Outflow of capital from Russia may reach $70 billion a year
In the third quarter of the current year, the net outflow of capital from Russia made up $18.7 billion. According to statistics from the Central Bank, the index has grown to $49.3 billion since the beginning of the year. The decrease of the interest in the Russian market is reflected in the negative stock dynamics, which is very sensitive to negative influences from the outside.
In the first quarter of the current year, the outflow of capital from Russia made up $21.4 billion. In the second quarter, the index made up $9.2 billion. Thus, the net outflow of capital from the Russian Federation during January-September of this year made up $49.3 billion.
Aleksei Ylyukaev, first deputy chairman of the Central Bank, stated in June that the outflow of capital from Russia could be evaluated at $35 billion in 2011. However, the volume of the outflow considerably exceeded the comparable index of the previous year during that time. In the beginning of October, the Central Bank revised the forecast about the outflow of capital towards a slight increase - $36 billion at year-end.
Sergei Ignatyev, the chairman of the Bank of Russia, said that the bank was not going to change anything about the forecast of the outflow of capital for 2011 in general. According to the project of basic direction of the monetary and credit policies for 2012-2014, the net outflow of capital from the Russian Federation in 2011 was planned to reach the level of $36 billion.
It is worthy of note that one of the reasons behind the outflow of capital from Russia is the fact that investors prefer to transfer their funds to less risky assets - in the United States, first and foremost. Even though the US credit rating was downgraded in August 2011, the US assets did not become less risky as opposed to the assets in other countries.
The last time, when the inflow of capital was registered in Russia, took place prior to the crisis - in 2007. The positive balance made up $81.7 billion back then. In 2009, the outflow capital made up $56.9 billion, and $35.3 billion in 2010.
"The increase of foreign assets can be connected with several factors. First off, it is the weakening of the ruble during the recent weeks. Secondly, it is the negative situation on financial markets and the reduction of oil prices. One should also bear in mind the political situation in the country. The current pre-election expectations are quite negative, which is also connected with a considerable outflow of capital. In my opinion, this situation will be preserved for a long time, and the level of the outflow of capital may near $70 billion," Anton Safonov, an expert with Investcafe said.
Russia's Ministry for Economic Development revised its forecast about the outflow of capital. Now the ministry expects a negative balance of $50 billion a year. According to previous forecasts from the ministry, the capital outflow was supposed to make up $35 billion as of year-end.
"The figure will be larger than was originally expected at the end of the year. For the time being we believe that it will be $50 billion or a little more," Deputy Minister for Economic Development Andrei Klepach told Prime news agency.
Next year, the Bank of Russia forecasts a reduction of the capital outflow from Russia to $15 billion if oil prices stay on the level of $75 per barrel. In case oil prices climb to $100 per barrel, the inflow and outflow of capital will have the zero balance. If prices rise up to $125 per barrel - the net inflow of $10 billion is expected,
Saturday, 4 June 2011
NBU Chief Squares Off With Prime Minister
KIEV, Ukraine -- Ukraine’s foreign exchange reserves will be depleted and the hryvnia will face downward pressure if the country fails to resume borrowing from the International Monetary Fund, the National Bank of Ukraine warned.
Serhiy Arbuzov, the governor of the NBU, in a letter to Prime Minister Mykola Azarov, directly accused the government of policies that have undermined cooperation with the IMF.
The sharp wording used in the letter, dated May 19 and leaked to media on Thursday, shows the extremely high level of concern at the NBU with the government’s economic policies.
The criticism from Arbuzov, a close confidant of President Viktor Yanukovych, may explain why the president had made repeated attacks against Azarov and his government over the past seven days.
The letter shows that Ukraine’s robust economic expansion and the hryvnia stability may be jeopardized by the end of the year if the government fails to resume borrowing from the IMF.
The negative scenario would lead to the failure to receive an estimated $9 billion this year, including $6.2 billion from the IMF and $850 million from the World Bank, but its final implications may be far greater, potentially leading to economic disaster.
“In conditions of continued current account deficit, this may lead to a considerable reduction of the foreign exchange reserves,” Arbuzov said.
The NBU’s foreign exchange reserves are currently estimated at about $35 billion, but may be soon start shrinking as Ukraine is due to repay debts, both state and corporate, by the end of the year.
The failure to resume cooperation with the IMF would “worsen Ukraine’s sovereign credit rating, increase foreign borrowing costs, reduce foreign direct investments, and increase demand for the hard currency,” Arbuzov said outlining the negative scenario.
Yanukovych on Wednesday sent the most serious warning yet to Azarov and his government to start painful reforms by dismissing three top government officials, including a deputy prime minister.
Azarov himself was given time until the end of July to hike housing and utilities tariffs, one of the key demands from the IMF needed for the resumption of lending.
The IMF postponed its $15 billion lending program to Ukraine earlier this year after the government had failed to hike gas prices for households and failed to implement pension reform that increases retirement age for women.
In a sign of desperation, the government re-submitted the pension reform legislation to Parliament on Tuesday, hours after it had been rejected by lawmakers, indicating the government wants the measure to be approved quickly.
At stake is $3 billion that the government may – or may not – receive from the IMF before the end of July as downward pressure is building on the country’s currency, the hryvnia.
Meanwhile, Azarov, asked on Thursday to comment on the prospects of the hryvnia, denied that there is any threat to the local currency.
“Right now the hryvnia is stable as never before,” Azarov said. “It will keep being stable.”
The sharp wording used in the letter, dated May 19 and leaked to media on Thursday, shows the extremely high level of concern at the NBU with the government’s economic policies.
The criticism from Arbuzov, a close confidant of President Viktor Yanukovych, may explain why the president had made repeated attacks against Azarov and his government over the past seven days.
The letter shows that Ukraine’s robust economic expansion and the hryvnia stability may be jeopardized by the end of the year if the government fails to resume borrowing from the IMF.
The negative scenario would lead to the failure to receive an estimated $9 billion this year, including $6.2 billion from the IMF and $850 million from the World Bank, but its final implications may be far greater, potentially leading to economic disaster.
“In conditions of continued current account deficit, this may lead to a considerable reduction of the foreign exchange reserves,” Arbuzov said.
The NBU’s foreign exchange reserves are currently estimated at about $35 billion, but may be soon start shrinking as Ukraine is due to repay debts, both state and corporate, by the end of the year.
The failure to resume cooperation with the IMF would “worsen Ukraine’s sovereign credit rating, increase foreign borrowing costs, reduce foreign direct investments, and increase demand for the hard currency,” Arbuzov said outlining the negative scenario.
Yanukovych on Wednesday sent the most serious warning yet to Azarov and his government to start painful reforms by dismissing three top government officials, including a deputy prime minister.
Azarov himself was given time until the end of July to hike housing and utilities tariffs, one of the key demands from the IMF needed for the resumption of lending.
The IMF postponed its $15 billion lending program to Ukraine earlier this year after the government had failed to hike gas prices for households and failed to implement pension reform that increases retirement age for women.
In a sign of desperation, the government re-submitted the pension reform legislation to Parliament on Tuesday, hours after it had been rejected by lawmakers, indicating the government wants the measure to be approved quickly.
At stake is $3 billion that the government may – or may not – receive from the IMF before the end of July as downward pressure is building on the country’s currency, the hryvnia.
Meanwhile, Azarov, asked on Thursday to comment on the prospects of the hryvnia, denied that there is any threat to the local currency.
“Right now the hryvnia is stable as never before,” Azarov said. “It will keep being stable.”
Friday, 15 October 2010
Ukraine Government Probe Implicates Rivals
KIEV, Ukraine -- Ukraine's government issued a raft of corruption allegations against the country's former prime minister Thursday—a move certain to step up tensions with her supporters who say the country's new president is creating an authoritarian state.
a new twist in Ukraine politics, the government of President Viktor Yanukovych has used Western expertise in leveling charges against his rivals.
Investigators released a report researched and written by U.S. private detectives and attorneys who have lately been employed by the country's political elite to burnish its credentials.
The report takes aim at officials who served under former Prime Minister Yulia Tymoshenko, a charismatic populist heroine of Ukraine's 2004 Orange Revolution who was defeated in elections at the beginning of the year and has since seen a number of allies arrested or investigated for corruption or mismanagement.
Ms. Tymoshenko, a longtime arch rival of Mr. Yanukovych, has called the investigations politically motivated.
Political analysts said the latest attack on Ms. Tymoshenko may backfire, since voters in Ukraine have in the past viewed corruption allegations as a public-relations tactic used to destroy opponents.
Ms. Tymoshenko's political career got a boost in the 1990s when she was briefly jailed on corruption charges that were later dropped.
"This is not an attempt to fight corruption," said Oleh Rybachuk, a former chief of staff in Ukraine's presidential administration. "It is a strategy to destroy their lifelong opponent [Tymoshenko]. She's no angel, but this is a selective approach."
Mr. Yanukovych's chief of staff, Serhiy Lyovochkin, denied any political motivation in the investigation, which has so far cost more than $2 million, and which officials say aims at retrieving stolen funds to state coffers.
The firms that compiled the report—the law firms Akin Gump Strauss Hauer & Feld, and Trout Cacheris, and the investigative firm Kroll Inc.—worked for five months in London, Washington and Kiev on the report.
The investigators deny their work is politically driven, and say they were retained to do research into genuine suspicions of unethical behavior.
The investigators compiled 2,000 pages of exhibits to back up allegations, and two civil suits have already been filed in the U.S. and U.K. against companies that allegedly aided corrupt government officials in skimming public funds.
While the report doesn't link Ms. Tymoshenko to any alleged theft, it does accuse some high-level officials around her.
The report says Ms. Tymoshenko steered hundreds of millions of dollars of budget money to boost her popularity before presidential elections that swept her out of power this year, when she was defeated by Mr. Yanukovych, whose allies in Parliament then fired her as prime minister.
Among the more serious charges, the report says Ms. Tymoshenko authorized the sale last year of about €320 million ($443 million) in carbon credits under the Kyoto Protocol framework, and used most of the proceeds to cover a shortfall in Ukraine's pension fund.
Although some has been returned to segregate accounts earmarked for environmental projects as directed by the Kyoto agreement, about €200 million hasn't.
The report also accused the Tymoshenko government of buying 1,000 imported vehicles for the Ministry of Health shortly before the elections, and using them mainly as a mobile advertising gimmick for her campaign.
The report accuses Ms. Tymoshenko of diverting money from a state stabilization fund for banks and steering it into an unrelated program to provide funding for 6.4 million citizens to register and formally own their plots of land.
Hryhoriy Nemyria, former deputy prime minister and a top adviser to Ms. Tymoshenko, declined to comment on specific allegations, saying he hadn't had a chance to review them.
But he denied any widespread corruption in her government, and called the report a smear campaign conducted under the guise of a professional investigation.
He noted that investigators looked only at the Tymoshenko government, without looking at Mr. Yanukovych's own role as prime minister from 2006 to 2007.
"These American firms are being used by a government widely accused of backsliding on democracy in a smear campaign to help cement their rule," he said.
The investigators said they necessarily limited the scope of their research to a few cases of concern to Ukrainian law enforcement and Finance Ministry officials.
They said they hope the report will stand on its merits and the vast amount of credible evidence gathered.
The report accuses officials in Ms. Tymoshenko's government of enriching themselves by acting as intermediaries in government purchases of vehicles, medical products, vaccines and 22,000 tons of sugar needed to replenish the country's supplies this year after they were sold off in the summer of 2009.
Mark MacDougall, who headed the investigation for Akin Gump, said the investigation ranged far outside Ukraine to the state of Oregon, the U.K., Latvia, Israel and the Seychelles, where it found "the use of extensive classic offshore money laundering structures."
Investigators said the findings give a rare glimpse into some of the methods of government graft in a country where allegations are plentiful but proof is usually scarce.
They allege that the cases were part of a wider pattern of malfeasance in Ms. Tymoshenko's government, and that its profile of a half-dozen cases was part of an "effort to provide a survey or cross-section of suspect government transactions during the stated period of time."
"From the start, our job has been to establish the facts," Mr. MacDougall said. "Every material finding in the report is backed by hard evidence."
Kroll and Akin Gump have in recent years been retained by top businessmen and politicians in other high-profile matters in Ukraine.
Kroll was in 2001 employed by a party backed by oligarch Viktor Pinchuk, son-in-law of Mr. Yanukovych's political patron, then-President Leonid Kuchma, to look into the killing of investigative journalist Georgiy Gongadze in 2000.
Mr. Kuchma had allegedly been caught on a tape recorded by a bodyguard discussing with leading officials how to deal with the journalist.
Although the U.S. government determined parts of the tape were authentic, Kroll produced a report maintaining Mr. Kuchma wasn't involved in Mr. Gongadze's killing.
Though some lower-level security service officers were ultimately convicted in the killing, the planners never were.
a new twist in Ukraine politics, the government of President Viktor Yanukovych has used Western expertise in leveling charges against his rivals.
Investigators released a report researched and written by U.S. private detectives and attorneys who have lately been employed by the country's political elite to burnish its credentials.
The report takes aim at officials who served under former Prime Minister Yulia Tymoshenko, a charismatic populist heroine of Ukraine's 2004 Orange Revolution who was defeated in elections at the beginning of the year and has since seen a number of allies arrested or investigated for corruption or mismanagement.
Ms. Tymoshenko, a longtime arch rival of Mr. Yanukovych, has called the investigations politically motivated.
Political analysts said the latest attack on Ms. Tymoshenko may backfire, since voters in Ukraine have in the past viewed corruption allegations as a public-relations tactic used to destroy opponents.
Ms. Tymoshenko's political career got a boost in the 1990s when she was briefly jailed on corruption charges that were later dropped.
"This is not an attempt to fight corruption," said Oleh Rybachuk, a former chief of staff in Ukraine's presidential administration. "It is a strategy to destroy their lifelong opponent [Tymoshenko]. She's no angel, but this is a selective approach."
Mr. Yanukovych's chief of staff, Serhiy Lyovochkin, denied any political motivation in the investigation, which has so far cost more than $2 million, and which officials say aims at retrieving stolen funds to state coffers.
The firms that compiled the report—the law firms Akin Gump Strauss Hauer & Feld, and Trout Cacheris, and the investigative firm Kroll Inc.—worked for five months in London, Washington and Kiev on the report.
The investigators deny their work is politically driven, and say they were retained to do research into genuine suspicions of unethical behavior.
The investigators compiled 2,000 pages of exhibits to back up allegations, and two civil suits have already been filed in the U.S. and U.K. against companies that allegedly aided corrupt government officials in skimming public funds.
While the report doesn't link Ms. Tymoshenko to any alleged theft, it does accuse some high-level officials around her.
The report says Ms. Tymoshenko steered hundreds of millions of dollars of budget money to boost her popularity before presidential elections that swept her out of power this year, when she was defeated by Mr. Yanukovych, whose allies in Parliament then fired her as prime minister.
Among the more serious charges, the report says Ms. Tymoshenko authorized the sale last year of about €320 million ($443 million) in carbon credits under the Kyoto Protocol framework, and used most of the proceeds to cover a shortfall in Ukraine's pension fund.
Although some has been returned to segregate accounts earmarked for environmental projects as directed by the Kyoto agreement, about €200 million hasn't.
The report also accused the Tymoshenko government of buying 1,000 imported vehicles for the Ministry of Health shortly before the elections, and using them mainly as a mobile advertising gimmick for her campaign.
The report accuses Ms. Tymoshenko of diverting money from a state stabilization fund for banks and steering it into an unrelated program to provide funding for 6.4 million citizens to register and formally own their plots of land.
Hryhoriy Nemyria, former deputy prime minister and a top adviser to Ms. Tymoshenko, declined to comment on specific allegations, saying he hadn't had a chance to review them.
But he denied any widespread corruption in her government, and called the report a smear campaign conducted under the guise of a professional investigation.
He noted that investigators looked only at the Tymoshenko government, without looking at Mr. Yanukovych's own role as prime minister from 2006 to 2007.
"These American firms are being used by a government widely accused of backsliding on democracy in a smear campaign to help cement their rule," he said.
The investigators said they necessarily limited the scope of their research to a few cases of concern to Ukrainian law enforcement and Finance Ministry officials.
They said they hope the report will stand on its merits and the vast amount of credible evidence gathered.
The report accuses officials in Ms. Tymoshenko's government of enriching themselves by acting as intermediaries in government purchases of vehicles, medical products, vaccines and 22,000 tons of sugar needed to replenish the country's supplies this year after they were sold off in the summer of 2009.
Mark MacDougall, who headed the investigation for Akin Gump, said the investigation ranged far outside Ukraine to the state of Oregon, the U.K., Latvia, Israel and the Seychelles, where it found "the use of extensive classic offshore money laundering structures."
Investigators said the findings give a rare glimpse into some of the methods of government graft in a country where allegations are plentiful but proof is usually scarce.
They allege that the cases were part of a wider pattern of malfeasance in Ms. Tymoshenko's government, and that its profile of a half-dozen cases was part of an "effort to provide a survey or cross-section of suspect government transactions during the stated period of time."
"From the start, our job has been to establish the facts," Mr. MacDougall said. "Every material finding in the report is backed by hard evidence."
Kroll and Akin Gump have in recent years been retained by top businessmen and politicians in other high-profile matters in Ukraine.
Kroll was in 2001 employed by a party backed by oligarch Viktor Pinchuk, son-in-law of Mr. Yanukovych's political patron, then-President Leonid Kuchma, to look into the killing of investigative journalist Georgiy Gongadze in 2000.
Mr. Kuchma had allegedly been caught on a tape recorded by a bodyguard discussing with leading officials how to deal with the journalist.
Although the U.S. government determined parts of the tape were authentic, Kroll produced a report maintaining Mr. Kuchma wasn't involved in Mr. Gongadze's killing.
Though some lower-level security service officers were ultimately convicted in the killing, the planners never were.
Saturday, 18 September 2010
Ukraine Raises $2bn In Eurobonds
KIEV, Ukraine -- Ukraine announced on Friday that it had raised $2bn through two separate Eurobond issues, a 10-year $1.5bn placement with a 7.8 per cent coupon and a 5-year $500m one at 6.9 per cent.
Mykola Azarov, prime minister, described the issue as Ukraine’s most successful.
“Book offers, meaning demand, were at a record high for Ukraine exceeding $6.2bn,” he said.
The issue, Ukraine’s first since November 2007, when the nation placed a $700m 10-year bond at 6.75 per cent, is seen as crucial to bridging the cash-strapped and recession-battered nation’s budget gap.
Ukraine found itself largely cut off from affordable credit when the global credit squeeze of 2008 turned into the 2009 global financial crisis. In the aftermath, Ukraine saw its gross domestic product plunge by 15 per cent during the global recession.
But the issue, which follows a Polish government bond issue of €1bn ($1.3bn) this week, demonstrates that debt markets are opening up more to emerging markets.
In particular, market appetite for Ukraine strengthened after this summer’s adoption of tough austerity measures, which, in turn, led to an agreement with the International Monetary Fund on a fresh $15bn standby loan.
Kiev originally attempted to issue a Eurobond this summer before re-engaging with the IMF. But it put off the issue until autumn, betting that improved market conditions and renewal of co-operation with the IMF would lower borrowing costs.
During the summer, the market had been ready to pay 9 per cent for a 10-year issue, while the government had been looking at a yield of 7 per cent, analysts said.
On Thursday, Privatbank, a leading Ukrainian bank, raised $200m through a 5-year Eurobond issue with a coupon of 9.4 per cent.
Alexander Valchyshen, head of research at Investment Capital Ukraine, a local investment bank, said that improved market conditions could trigger a “borrowing spree” by Ukrainian corporate issuers.
He said “new sources of financing were gradually opening up to Ukraine’s government, in addition to the IMF and Russia.” Ukraine borrowed $2bn from Russia’s Vneshtorgbank this summer to cover a budget gap.
“But if a wave of new corporate borrowings follows and gets too big, it could trigger debt problems in the future, putting pressure on the currency as happened in 2008-2009,” Mr Valchyshen added.
Wednesday, 25 August 2010
$65 million a month stolen by Russian bankers
A group of top Russian bankers has been caught with its fingers in the till – to the tune of $65 million a month.
The interior ministry reported on Wednesday that the evidence pointed to leading officials at Tempbank, Imperiabank and several others cashing more than 2 billion roubles every month via inflated fees.
Several searches have yielded further evidence, including $100,000 found in a car belonging to one of the suspects.
Thursday, 12 August 2010
Business Sense: By Taxing Foreigners At Higher Rate, Tax Code Will Hurt Investment
KIEV, Ukraine -- Jorge Zukoski says that a 30 percent income tax on foreigners is unjustified, compared to 15 percent for Ukrainians. The latest version of the draft tax code was published this week for public discussion.
Since the chorus of disapproval that met its first publication in June, some positive changes have been made. But a large number of discriminatory and unfavorable provisions remain, and more work is needed to create a fair and thoughtful final document that will likely be voted on in parliament in September.
The American Chamber of Commerce in Ukraine applauds the foresight of parliament in ensuring that this far-reaching piece of legislation is open for input from relevant stakeholders.
The chamber and the business community we represent has spent a lot of time preparing professional and detailed recommendations and targeted amendments that are geared to protecting the interest of the state as well as the private sector and the citizens of Ukraine.
Unfortunately, and despite assurances from the relevant parliamentary committee as well as the Cabinet of Ministers, a majority of these suggestions have not yet been incorporated into the latest version of the document.
Keep in mind that the original version of the draft tax code submitted to parliament on June 15 created such an outcry that the process of adoption was put on hold to solicit and accept input for the new comprehensive Tax Code.
Therefore, committees and working groups comprised of tax experts united under the chamber umbrella continue working on improving the quality and consistency of this piece of draft legislation within the framework of a working group on the draft tax code headed by Deputy Prime Minister Sergiy Tigipko, as well as with other relevant decision makers.
One of the primary focuses of the business community has been and will continue to be focused on ensuring equitable and equal treatment of all taxpayers. The latest version of the draft tax code no longer creates additional problems for taxpayers within the process of administration of taxes, but some outstanding issues remain rather restrictive.
An example of a positive improvement is a provision that foresees that a documentary check is conducted by tax authorities only by agreement with the taxpayer. This important change will significantly simplify doing business considering the historical number of tax audits experienced by the business community in the past.
Another positive sign is that the latest version of the draft tax code contains regulations that foresee a resolution in favor of the taxpayer, not regulatory bodies, in a case where there are contradictions within various legislative provisions.
At the same time, the foreign investment community remains concerned with the personal income taxation section, which foresees an unfriendly and discriminatory 30 percent income tax for foreign employees working in Ukraine, keeping in mind that the income tax rate for Ukrainian citizens stands at 15 percent.
This is not in line with international best practices and in some cases may contravene bilateral tax treaties. (Foreigners working in Ukraine will pay income tax at 15 percent on worldwide income if they declare themselves residents.)
This discriminatory taxation of professionals creates unfavorable conditions for recruiting new employees and retention of current expatriates and will adversely impact the business activity of many international companies operating in Ukraine.
The business community remains strongly committed to further promoting the necessity to balance the rights, obligations and accountability of taxpayers and the tax authorities.
More specifically, it is crucially important to introduce a provision into the draft tax code obliging authorities to be liable to taxpayers for failure to refund value-added tax or accurately execute legislatively prescribed acts on a timely basis.
Such practices are common around the globe and will bring Ukraine’s tax system in line with international best practices, helping to attract and retain investment.
The expert community, united under the chamber’s umbrella, continues its work on developing a well thought-through and viable final version of the draft tax Code, advocating for much-needed, comprehensive reform of the Ukrainian taxation system, promoting tax efficiency, fairness, neutrality as well as effective tax administration and enforcement, which are essential to increasing Ukraine’s competitiveness and helping to overcome the recession that the economy is experiencing and allowing the country to take advantage of global growth trends.
It is a big task and one that the business community is committed to getting right the first time.
Since the chorus of disapproval that met its first publication in June, some positive changes have been made. But a large number of discriminatory and unfavorable provisions remain, and more work is needed to create a fair and thoughtful final document that will likely be voted on in parliament in September.
The American Chamber of Commerce in Ukraine applauds the foresight of parliament in ensuring that this far-reaching piece of legislation is open for input from relevant stakeholders.
The chamber and the business community we represent has spent a lot of time preparing professional and detailed recommendations and targeted amendments that are geared to protecting the interest of the state as well as the private sector and the citizens of Ukraine.
Unfortunately, and despite assurances from the relevant parliamentary committee as well as the Cabinet of Ministers, a majority of these suggestions have not yet been incorporated into the latest version of the document.
Keep in mind that the original version of the draft tax code submitted to parliament on June 15 created such an outcry that the process of adoption was put on hold to solicit and accept input for the new comprehensive Tax Code.
Therefore, committees and working groups comprised of tax experts united under the chamber umbrella continue working on improving the quality and consistency of this piece of draft legislation within the framework of a working group on the draft tax code headed by Deputy Prime Minister Sergiy Tigipko, as well as with other relevant decision makers.
One of the primary focuses of the business community has been and will continue to be focused on ensuring equitable and equal treatment of all taxpayers. The latest version of the draft tax code no longer creates additional problems for taxpayers within the process of administration of taxes, but some outstanding issues remain rather restrictive.
An example of a positive improvement is a provision that foresees that a documentary check is conducted by tax authorities only by agreement with the taxpayer. This important change will significantly simplify doing business considering the historical number of tax audits experienced by the business community in the past.
Another positive sign is that the latest version of the draft tax code contains regulations that foresee a resolution in favor of the taxpayer, not regulatory bodies, in a case where there are contradictions within various legislative provisions.
At the same time, the foreign investment community remains concerned with the personal income taxation section, which foresees an unfriendly and discriminatory 30 percent income tax for foreign employees working in Ukraine, keeping in mind that the income tax rate for Ukrainian citizens stands at 15 percent.
This is not in line with international best practices and in some cases may contravene bilateral tax treaties. (Foreigners working in Ukraine will pay income tax at 15 percent on worldwide income if they declare themselves residents.)
This discriminatory taxation of professionals creates unfavorable conditions for recruiting new employees and retention of current expatriates and will adversely impact the business activity of many international companies operating in Ukraine.
The business community remains strongly committed to further promoting the necessity to balance the rights, obligations and accountability of taxpayers and the tax authorities.
More specifically, it is crucially important to introduce a provision into the draft tax code obliging authorities to be liable to taxpayers for failure to refund value-added tax or accurately execute legislatively prescribed acts on a timely basis.
Such practices are common around the globe and will bring Ukraine’s tax system in line with international best practices, helping to attract and retain investment.
The expert community, united under the chamber’s umbrella, continues its work on developing a well thought-through and viable final version of the draft tax Code, advocating for much-needed, comprehensive reform of the Ukrainian taxation system, promoting tax efficiency, fairness, neutrality as well as effective tax administration and enforcement, which are essential to increasing Ukraine’s competitiveness and helping to overcome the recession that the economy is experiencing and allowing the country to take advantage of global growth trends.
It is a big task and one that the business community is committed to getting right the first time.
Tuesday, 13 July 2010
Ukraine Cabinet To Help Kiev City To Pay Debt In 2010
KIEV, Ukraine -- Ukraine’s Finance Ministry said it will help the capital, Kiev, repay its domestic and foreign debt this year, First Deputy Minister Vadym Kopylov.
“Ukraine’s Cabinet and the Kiev administration will further take steps to ensure Kiev city’s budget has enough funds to hold an efficient debt policy,” Kopylov said yesterday in a statement, e-mailed by the ministry press office.
Kiev’s 2011 dollar bonds rose to 96 cents on the dollar, the highest since July 2, pushing the yield down to 13.016 percent, Bloomberg data shows.
Kiev is likely to restructure principal of its $200 million of notes due 2011 and $250 million of bonds due 2012, while continuing to meet interest payments, said an unidentified official in the city’s administration on July 5.
“Recent contradictory statements by city of Kiev officials on a possible restructuring are linked to a de-facto takeover of the city government by central authorities,” said Kaan Nazli, director at New York-based Medley Global Advisors LLC in an e- mailed note today. They “are likely to result in a restructuring offer later this year.”
Nazli said that “if the restructuring does take place, it will weigh on the sentiment of sovereign bonds as well as other Ukrainian corporates and quasi-sovereigns.”
The restructuring “would trigger concern that more restructuring would be on the way, despite the recent improvement in sovereign credit ratings and the International Monetary Fund backstop,” he said.
The IMF said on July 3 it agreed a $14.9 billion loan for Ukraine to replace an existing program and the government this month plans to sell its first Eurobonds since 2007 to help cover its deficit
Monday, 12 July 2010
Ukraine Cabinet to Help Kiev City to Pay Debt in 2010
Ukraine’s Finance Ministry said it will help the capital, Kiev, repay its domestic and foreign debt this year, First Deputy Minister Vadym Kopylov.
“Ukraine’s Cabinet and the Kiev administration will further take steps to ensure Kiev city’s budget has enough funds to hold an efficient debt policy,” Kopylov said today in a statement, e-mailed by the ministry press office today. Kiev’s 2011 dollar bonds rose to 96 cents on the dollar, the highest since July 2, pushing the yield down to 13.016 percent, Bloomberg data shows.
Kiev is likely to restructure principal of its $200 million of notes due 2011 and $250 million of bonds due 2012, while continuing to meet interest payments, said an unidentified official in the city’s administration on July 5.
“Recent contradictory statements by city of Kiev officials on a possible restructuring are linked to a de-facto takeover of the city government by central authorities,” said Kaan Nazli, director at New York-based Medley Global Advisors LLC in an e- mailed note today. They “are likely to result in a restructuring offer later this year.”
Nazli said that “if the restructuring does take place, it will weigh on the sentiment of sovereign bonds as well as other Ukrainian corporates and quasi-sovereigns.”
The restructuring “would trigger concern that more restructuring would be on the way, despite the recent improvement in sovereign credit ratings and the International Monetary Fund backstop,” he said.
The IMF said on July 3 it agreed a $14.9 billion loan for Ukraine to replace an existing program and the government this month plans to sell its first Eurobonds since 2007 to help cover its deficit.
A crumbling empire
The default of Sergei Pugachyov’s Mezhprombank, Russia’s first since 1999, has got the wolves racing to snap up the empire of the man once dubbed “Putin’s banker”.
Mezhprombank said in a statement last week that it had failed to repay 200 million euros – and would also default on another $200 million in loan participation notes due to mature in 2013.
Ahead of the deadline Pugachyov had been desperately trying to offload assets ahead of the debt maturing, including his major shipbuilding assets Severnaya Verf and Baltisky Zavod – but had found no takers.
The oligarch had floated a sale with state-owned shipbuilder OSK, but was only offered 25 billion roubles ($810 million), a quarter of Pugachyov’s demands.
The Kremlin-connected banker – once worth $1.9 billion according to Forbes – is likely to see his major assets taken off his hands.
Russia’s central bank, which holds half of Mezhprombank’s 50 billion rouble ($1.62 billion) debt, refused requests to roll over the loans, only agreeing to extend them in return for Severnaya Verf and Baltisky Zavod as collateral.
Analysts say that OSK have been holding out to snap up the assets on the cheap since Mezhprombank’s default had become obvious after a series of downgrades from ratings agencies.
The sharks are also licking their lips at the potential sale of the profitable Elegest coal deposit in the Tuva Republic in anticipation of a mass sell-off.
State-controlled lender VTB has taken the coalfield as collateral for a $600 million loan, but analysts say that steel giants NLMK and Severstal are ready to pounce.
“We think NLMK may be interested in acquiring the Elegest deposit, as the company lacks integration in coking coal,” Boris Krasnojenov, a metals and mining analyst at Renaissance Capital, wrote in a note to investors
But while Pugachyov is likely to see many of his assets snatched by rivals as he scrambles for funds to meet the Central Bank’s deadline, Mezhprombank’s bondholders could see their cash disappear completely.
“As a bank I doubt they will survive,” said one banker, who asked not to be named. “The question is whether the bondholders will get their money back because the bank – without any deposit base and without any sources of financing itself – has very serious asset quality issues.”
Pugachyov’s empire had already required rescuing last year, with VTB granting him a $2.5 billion loan secured against plots of land outside Moscow last year.
Many investors had already raised concerns about Mezhprombank, due to its inability to take consumer deposits while its asset quality deteriorated as the crisis affected valuations.
“This bank has always been about related-party financing and that’s it,” said the banker. “It had to happen some time – and it just happened because the Central Bank decided
not to extend their loans.”
Analysts say the bank’s default does not pose any threat to the banking sector following the government’s decision to pump in 200 billion roubles of liquidity into the system.
“This particular default is clearly a one-off development rather than one with systemic implications,” said Vladimir Osakovsky, a banking analyst at Unicredit.
Osakovsky added that there were still concerns about the quality of banking assets as a whole, but that government measures meant most lenders were flush with cash.
The default has generated speculation that Pugachyov, who has close ties to the Kremlin, had fallen from favour politically, but analysts played down rumours of his connections.
“The problems that the group related to Mezhprombank is facing are more business-related than politically-motivated,” said Osakovsky.
Mezhprombank’s bondholders have until July 21 to decide whether to accept the one-year extension offered by the bank with a continued refinancing rate of 9 per cent.
While Sergei Pugachyov’s rise and fall in the banking world fits perfectly with his nickname, the “Orthodox Banker”, his love life does not.
Given the name by the Russian media for his strict religious beliefs, Pugachyov followed the orthodox road to riches for the modern oligarch. After attending the Leningrad State University, where Putin also studied, he kept close ties to the Kremlin.
Reuters says his current woes could be a sign that he has fallen out of favour, though his assets in shipbuilding and real estate have also been hard hit by the crisis.
It is Pugachyov’s personal life, however, that is fascinating – and it is more reminiscent of romantic fiction than Biblical austerity. He is engaged to Countess Alexandra Tolstoy, an actress and descendant of the writer Leo Tolstoy.
Both were married to other people when they met, but have now obtained divorces to marry each other later this year. The pair met when Tolstoy became Pugachyov’s English teacher, but did not really hit it off until two years later, the bride-to-be told Tatler.
“He now says he fell in love with me the moment I walked in,” Tolstoy said. “I didn’t have a clue. He seemed like a very formal, serious person.”
Pugachyov represents the Tuva Republic in Russia’s upper house but came in for criticism for not visiting the region enough. He is reportedly an avid Francophile, with a chateau overlooking Monte Carlo. His son, Alexander Pugachyov, owns French tabloid France-Soir.
Sunday, 11 July 2010
Sex Now Chief Cause Of Ukraine's AIDS Epidemic
KIEV, Ukraine -- "I am not a drug addict!" insisted Andri, 32, staring desperately at the walls of a clinic for people with HIV in Kiev.
The young father contracted HIV through a casual sexual relationship, like alarming numbers of others in a country where heterosexual transmission has overtaken drug abuse as the main cause of AIDS.
The trend has alarmed researchers, showing that the HIV epidemic in Ukraine has now moved out of the niche of intravenous drug users and into the heterosexual mainstream.
With an HIV prevalence rate of 1.11 percent among Ukraine's adult population as of 2009, the former Soviet republic is one of the states in Europe worst hit by the epidemic.
For years, the virus has been spread mainly in Ukraine by intravenous drug users but the trend has changed with startling speed.
Since 2008, more Ukrainians have been contracting HIV through heterosexual sex than through drug abuse. In 2009, 43 percent of Ukrainians infected with HIV caught the virus through heterosexual sex and 35 percent by drug injection.
Experts have warned that this means the epidemic risks no longer affecting mainly high-risk groups like drug users, prostitutes and homosexuals but the general population as a whole.
"There are already signs of a generalisation" with the HIV infection rate of pregnant women now standing at more than one percent in some regions, said Svitlana Antonyak, an official from the national HIV clinic.
"Two thirds of cases of sexual transmission are linked to intravenous drug use," said Tetyana Deshko of the Ukrainian branch of the NGO International HIV/AIDS alliance.
She described the typical path of transmission in today's Ukraine: "A drug user who probably does not know he is HIV positive has a relationship with a woman who probably does not know that her partner is a drug user."
Andri was infected with HIV during an adulterous relationship with a former lover who he suspects now is a drug addict.
"I saw the traces of injections on her arms but she said it was because she had just been to hospital," said Andri, who learned of his diagnosis at the start of the year.
He insists that he used a condom, but it broke. "I put another one on, and thought that it would do. It was stupid. Stupid!"
Almost half of Ukrainians between 25-49 who say they had more than one sexual partner in a year do not use condoms, said a national report compiled by the Ukrainian ministry of health for UNAIDS.
"A condom is often seen (in Ukraine) as a sign of not trusting your partner," said Tetyana Deshko. Moreover many in Ukraine still see AIDS as a problem affecting only disadvantaged groups."
"There's lack of information campaigns of good quality, capable of changing young people's behaviour," Antonyak said.
"My 20-year old son told me he always uses a condom because he was here, at the hospital, helped me and saw people suffering here. Probably that's what we need to do", she added.
Alarmingly "only one HIV victim in four" in Ukraine is actually aware that they have been infected, said the national report.
As of January, 101,000 Ukrainians were infected with HIV according to official figures but the real number is estimated at 360,000. The number of deaths from AIDS was 19,000 between 1987 and April.
However in a ray of hope, the use of antiretroviral therapy resulted in the first cut in the mortality rate from AIDS, of 2.6 percent, last year. Antiretrovirals were introduced to Ukraine only six years ago.
But funds are limited and at least 7,500 patients who need the drugs are not receiving them.
"We really need help from donors," said Svitlana Cherenko, head of the state committee for the fight against AIDS.
Ukraine already received 230 million dollars from the Global Fund to Fight AIDS, Tuberculosis and Malaria for the years 2004-2012 and will this month put in a new request with the organisation for estimated 300 million dollars for 2012-2017.
Tuesday, 6 July 2010
Yanukovych Submits Law On Ukraine’s Central Bank Independence
KIEV, Ukraine -- Ukraine’s President Viktor Yanukovych submitted to the Parliament a draft law he says will strengthen central bank independence and help the country qualify for International Monetary Fund and World Bank loans.
Yanukovych wants to extend the governor’s term of office to seven years from five to avoid a changeover coinciding with parliamentary and presidential elections, according to the draft, posted today on the website of the Kiev-based assembly.
The governor, his deputies and the bank’s board must also suspend any party memberships and cannot hold shares of any commercial lender.
Ukraine reached an agreement with the IMF on July 3 for a new $14.9 billion loan after a fund mission approved economic policies aimed at narrowing the budget deficit.
The lender’s Executive Board will make a final decision by late July following “approval of legislative changes relating to the budget and financial sector,” the IMF said.
The World Bank said it is also ready to give Ukraine a loan to cover the deficit and to stabilize the financial industry after the IMF resumes lending and after the country adopts some laws, Martin Raiser, the lender’s director for Ukraine, Belarus and Moldova, said on July 1.
The central bank’s priorities are to ensure stability of the hryvnia and consumer prices, according to the draft. The bank is also banned from giving loans to the government, including financing the deficit.
Yanukovych wants to increase the number of deputy governors to six from four. The bank’s council should not have a right to veto board decisions, the draft says.
The governor, his deputies, members of the board and members of the council are also forbidden to take the post of chief executive officer at a commercial lender during the first year after they resign from the central bank, the law states.
Yanukovych wants to extend the governor’s term of office to seven years from five to avoid a changeover coinciding with parliamentary and presidential elections, according to the draft, posted today on the website of the Kiev-based assembly.
The governor, his deputies and the bank’s board must also suspend any party memberships and cannot hold shares of any commercial lender.
Ukraine reached an agreement with the IMF on July 3 for a new $14.9 billion loan after a fund mission approved economic policies aimed at narrowing the budget deficit.
The lender’s Executive Board will make a final decision by late July following “approval of legislative changes relating to the budget and financial sector,” the IMF said.
The World Bank said it is also ready to give Ukraine a loan to cover the deficit and to stabilize the financial industry after the IMF resumes lending and after the country adopts some laws, Martin Raiser, the lender’s director for Ukraine, Belarus and Moldova, said on July 1.
The central bank’s priorities are to ensure stability of the hryvnia and consumer prices, according to the draft. The bank is also banned from giving loans to the government, including financing the deficit.
Yanukovych wants to increase the number of deputy governors to six from four. The bank’s council should not have a right to veto board decisions, the draft says.
The governor, his deputies, members of the board and members of the council are also forbidden to take the post of chief executive officer at a commercial lender during the first year after they resign from the central bank, the law states.
Thursday, 1 July 2010
Russia's Sberbank Plans To Become Top Ukrainian Bank - Chairman
YALTA, Ukraine -- Russia's largest bank, Sberbank, plans to develop its network in Ukraine and become the market leader there, bank Chairman German Gref said.
"We plan to considerably expand our presence here [Ukraine] over the next few years and I think we will undoubtedly become the number one bank in Ukraine," he told reporters late on Tuesday after the opening ceremony of the bank's Yalta branch, Sberbanks' 11th in Ukraine.
Sberbank's wholly-owned Ukrainian subsidiary is now among the top 20 Ukrainian banks by assets.
Gref said that Sberbank was planning to develop its own network in Ukraine instead of buying one of the Ukrainian banks as was announced earlier.
"To buy an old network and then reinvest in it is a too expensive and is sometimes an unjustified deal," he added.
He also said that Sberbank was finalizing a deal to buy a resort on the Crimean Peninsula to be used mainly by bank employees but also by outside clients.
"We plan to considerably expand our presence here [Ukraine] over the next few years and I think we will undoubtedly become the number one bank in Ukraine," he told reporters late on Tuesday after the opening ceremony of the bank's Yalta branch, Sberbanks' 11th in Ukraine.
Sberbank's wholly-owned Ukrainian subsidiary is now among the top 20 Ukrainian banks by assets.
Gref said that Sberbank was planning to develop its own network in Ukraine instead of buying one of the Ukrainian banks as was announced earlier.
"To buy an old network and then reinvest in it is a too expensive and is sometimes an unjustified deal," he added.
He also said that Sberbank was finalizing a deal to buy a resort on the Crimean Peninsula to be used mainly by bank employees but also by outside clients.
Sunday, 27 June 2010
Wednesday, 23 June 2010
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