Especially in Kyiv, Ukraine, scandals involving deceitful developers are common: they draw in potential residents by promising favorable conditions, gather funds as investments, and then abscond with the money.
Last year’s scandal with “Ukrbud” is still fresh in memory, and the recent sensational statements by its head Mykyta about the involvement of the country’s top leadership in the fraud only keep it from being forgotten. Who is right and who is to blame is hard to figure out. We are talking about something a bit different.
From all this, an average Ukrainian probably understood only one thing: no matter how famous a developer’s name is, or how seemingly spotless their reputation is, no one is safe from losing their hard-earned money. Another firm belief is the simple conclusion that the heads of these organizations are willing to do anything for money. And many of them succeed with their schemes.
After the freezing of 26 “Ukrbud” projects, in which people invested significant money, the President of Ukraine solemnly assured that investors would not suffer and the projects would be completed. And this would be done by another corporation with a “clean” image – Kyivmiskbud (“Kyivmiskbud”). They apparently did not deny this information and even took 23 projects on their balance sheet. But after a few months, investors who put money into future apartments appealed again to the President – they claimed that Kyivmiskbud had only taken on five projects that were already practically finished.
This once again confirmed the opinion of Ukrainians about developers. So, perhaps, it is worth understanding what Kyivmiskbud is. This corporation is one of the largest domestic real estate market operators. The holding company includes, as subsidiaries and associated members, city-wide construction trusts, housing construction plants, industrial enterprises, transport and construction mechanization organizations. In total, the company comprises more than 30 enterprises. 80% of Kyivmiskbud’s shares belong to the city of Kyiv. The company operates mainly in Kyiv, but also in cities like Zhytomyr, Poltava, and Bucha. Everything seems fine and clear. But if you look at the company’s leadership, some questions arise.
Kyivmiskbud is headed by Ihor Kushnir. He took over the company in 2012, coming from the post of Deputy Minister of Defense of Ukraine. A rather strange career zigzag, of course. But we have a free country, so anything is possible. In total, he is involved in the activities of eight companies in one way or another.
Billions in the hands of Kyivmiskbud head Ihor Kushnir: Corruption schemes in Kyiv’s construction corporation
Besides this minor scandal, Kushnir is also linked to a land fraud case in the Brovary district. Kyivmiskbud purchased 28 hectares of land for 200 million hryvnias, but it turned out that the land was only suitable for a landfill, not construction. There were also rumors about an obviously inflated price comparable to the cost per hundred square meters in central Kyiv. The scandal died down, but someone made a tidy profit.
A new scandal arose when, with the help of influential figures in government structures, the property of the state publishing house “Pressa Ukrainy” was written off, and 3 hectares of land it occupied were transferred for housing, office buildings, and shopping and entertainment centers construction. Kyivmiskbud received the land. Through this simple operation, Kushnir managed to profit by selling ready real estate for 255 million hryvnias.
Administrative buildings on Belynskogo and Mechnikova streets and the “Obereg” hotel were also acquired at undervalued prices for subsequent resale. Moreover, Kushnir and his accomplices orchestrated the deliberate bankruptcy of the companies “Medbud” and “Ecos.” After that, on behalf of the Kyivmiskbud holding, premises of these companies were transferred to operation by LLC “First Ukrainian Expert Center.” Immediately after, the operating costs for the former premises of “Ecos” rose tenfold, a classic example of money laundering in a state company.
Another “profitable” project for Kyivmiskbud was an “investment” in completing the Mirax Plaza office and residential center, which belonged to Russian oligarch Sergey Polonsky.
According to the publication sxemy.com, as a result of such illegal activities, Ihor Kushnir and his associates embezzled more than one billion hryvnias of state funds.
It is worth adding that besides misappropriating funds from the municipal holding company, its management engaged in purchasing real estate and land at undervalued prices or simply bankrupting their subsidiaries to obtain land plots on which housing was subsequently built.
Among the series of scandals around Kyivmiskbud, one of the loudest was the 2016 events when the corporation tried to build a high-rise in Kyiv at 2 Sviatoshynskyi Lane. The land was designated for a kindergarten, but this did not deter the developer. On the contrary, they backed their arguments with “titushky” (hired thugs) who beat residents of the neighborhood who protested the construction.
In September 2016, after another clash at the construction site, fighters from the Azov battalion blocked Kyivmiskbud’s office. Initially, activists banged bats and shouted, but when police surrounded the building, smoke grenades were used.
The corporation was even forced to suspend work on all projects and demanded the government “restore order” and “clamp down on paid provocateurs” who “interfere with work.” However, the conflict was later hushed up.
The fact that Kyivmiskbud’s activities are far from smooth is evidenced by the court registry.
Billions in the hands of Kyivmiskbud head Ihor Kushnir: Corruption schemes in Kyiv’s construction corporation
As you can see, there are 871 court decisions related to Kyivmiskbud. So, its management may well clean the internet and leave only commissioned materials praising the company, but such a number of court cases speaks, at least, that the holding’s operations are far from perfect.
As evidence of the “level” of Kyivmiskbud’s management, the following example can be given:
Billions in the hands of Kyivmiskbud head Ihor Kushnir: Corruption schemes in Kyiv’s construction corporation
It would be laughable, of course, but… To prompt Kyivmiskbud and its head Ihor Kushnir to repair a porch at one of the holding’s facilities, the intervention of Member of Parliament Maria Mezentseva and a whole parliamentary inquiry were needed! For those who don’t know: a parliamentary inquiry is a demand by a people’s deputy supported by the Verkhovna Rada. The porch at 9-V Hlushkova Street in Kyiv was voted on by deputies of the Verkhovna Rada. Whether the porch was eventually repaired is unknown.
Regarding the head of Kyivmiskbud, Ihor Kushnir, the result of his active activities was an increase in his personal wealth. For example, in 2017, he purchased an $11 million house of 800 square meters in San Diego, in warm and sunny California.
Kushnir’s wife owns an apartment in the aforementioned “French Quarter” and two parking spaces. For those outside the capital: a parking space in downtown Kyiv costs more than an apartment, for example, in Zhytomyr. It’s not a cheap pleasure. She bought all this in 2017. The apartment cost $161,000.
Kushnir’s children are not poor either: his son and daughter own a 200 square meter apartment in the “Zarechny” residential complex, bought for $309,000, and two parking spaces there as well.
The parking spaces are not empty — they are occupied by Mercedes E250 Cabriolet, Range Rover, Mercedes E250 CDI, and Mercedes E220. Not strangers, you understand.
Moreover, right after being appointed president of Kyivmiskbud, Ihor Kushnir began to travel actively. Since 2012, he and his family traveled abroad on average 12 times a year. They visited Germany, the USA, the UK, Austria, France, and the Seychelles.
All this would be quite normal because Ihor Kushnir is the top manager of one of the strongest construction corporations in the country. If not for one “but.” It lies in the fact that Kyivmiskbud is not a private enterprise. Its owner is the city of Kyiv. That is, the profits from the company’s activities should go to the city budget. And the head of Kyivmiskbud apriori cannot have an income allowing him to buy a house in California. But apparently, no one cares.
True, the publication TVgolosnaroda conducted its investigation back in 2017:
It is still publicly available and has been viewed by more than 22 thousand people. But apparently, no one whose official duties include investigating various scams paid attention to the material. Because the result is not just zero. On the contrary, Ihor continues to work as president of Kyivmiskbud.
And he has even twice been awarded the title of the best manager in the country. Or does this mean quite the opposite—that attention was indeed paid, but conclusions were made completely different from those hoped for by the authors of the investigation?