LRT Investigation. R. Karbauskis’ secretive business in Belarus. What did the politician seek to hide?

Ramūnas Karbauskis
DELFI / Domantas Pipas

Furthermore, as the LRT Investigation department has uncovered, R. Karbauskis has long concealed a business in Belarus for over a decade. R. Karbauskis’ Agrokoncernas owns a fertiliser production company there. The politician’s business has granted the company hundreds of thousands in loans, however, coincidentally or not, the business was discarded as soon as R. Karbauskis entered Seimas. The company in Belarus was led by an individual, who arrived from a factory, which belonged to A. Lukashenko‘s group Belneftekhim.

Agrokoncernas explains that the business failed and thus does not want to discuss it.

Fertiliser from V. Putin’s supporters

Another Agrokoncernas partner in Russia is the fertiliser and chemistry company Kuibyshev Azot located in the Samara region, Tolyachi city.

The factory is led by Viktor Ivanovich Gerasimenko, who is a shareholder of the factory and as the LRT Investigation Department has uncovered, who belongs to V. Putin’s United Russia. In the year 2000, when V. Putin first ran for president, V. Gerasimenko was a backer of V. Putin.

V. Gerasimenko led the factory from 1992 to 2015, later being replaced in the office by his son Aleksander, while V. Gerasimenko himself became the board chairman of Kuibyshev Azot.

V. Gerasimenko has received a number of awards from the Russian government – I and II degree medals For Merits to the Fatherland and the 2002 National Prize.

In 2011, the Duma ruled that V. Gerasimenko was declared honorary citizen of Tolyachi city.

By the way, in 2011 and 2016, V. Gerasimenko also participated in the Russian regional Duma elections as a representative of United Russia. In 2011, in the elections to become a deputy in Samara city, he ended up third, but refused the mandate after the elections.

V. Gerasimenko directly owns 2.94% of the factory’s shares, with another 1.5% of the shares owned by his family members – sons and wife.

Kuibyshev Azot has a number of minor shareholders, their shares (up to 5%) comprise 51.51% of the factory’s total. The rest of the shares are split as follows: 27.43% belonging to LLC Kuybyshevazot-plus; 15.99% to LLC Aktivinvest and 5.07% to LLC Kuybyshevazot-invest.

However, the sole shareholder of Agrokoncernas, R. Karbauskis assures he has not reviewed, who is in charge of Kuibyshev Azot and who its shareholders are. The politician finds no issue with the shareholder’s party affiliation however, even if it is the ruling party in Russia. R. Karbauskis notes that there is probably no company in Russia that would not have shareholders belonging to V. Putin’s party and emphasises that large companies have numerous shareholders, thus the only way to avoid such situations would be a total ban on imports from Russia.

“It is probably a matter of attitude. We should try to understand, what contemporary Russia is. If a person is a member of United Russia and at the same time is the director of some large factory, in principle he cannot not have links to the regime. We often want to separate business from politics, separate something else. That does not happen in Russia, Russia doesn’t work that way. In Russia it is all a part of the regime, which is criminal and poses a threat to us,” political scientist Marius Laurinavičius commented on R. Karbauskis’ excuses.

Agrokoncernas itself does not reveal the amounts of fertiliser imported from Kuibyshev Azot and downplays it as insignificant.

Long concealed business in Belarus

R. Karbauskis’ Agrokoncernas is operating not only in Russia, but also Belarus. It’s factories import fertiliser from here as well and it is no secret. However, the politician’s ownership of a factory in Belarus was kept silent during his election campaigning.

R. Karbauskis and individuals linked to him own an empire, which is comprised of at least forty companies. When scandals arose regarding the politician’s business activities, R. Karbauskis declared the shares he held in companies. However, he never spoke about his aims in Belarus in public, getting rid of the Belarussian company half a year after the elections.

Up to the middle of last year, Agrokoncernas owned the Belarussian company Xoll Kemikal. The company produces fertiliser and Agrokoncernas held 83.22% of tis shares.

Xoll Kemikal is based in the Belarussian area of Brest, near Baranovich city, which is just a few hundred kilometres from Lithuania and thus – well placed for fertiliser transport.

Agrokoncernas purchased shares in the Belarussia company prior to the financial crisis in 2008, at the same time purchasing the Latvian SIA Zemnor, which would later become SIA Latagrokoncerns.

Initially in 2008, R. Karbauskis’ business purchased 50% of Xoll Kemikal shares, paying, according to Agrokoncernas financial reports, 43.7 thousand litas (12.6 thousand euro).

In December of the same year, Agrokoncernas signed a contract under which it committed to purchase another 30% of the company’s shares, paying another 3 thousand litas for it. The financial report also notes that Agrokoncernas committed to lend the Belarussian company a loan equivalent to 111.5 thousand euro.

Agrokoncernas thus obtained 83.22% of the company’s shares. It does not, however, reveal to whom the remaining 16.78% of shares belonged to and in a number of commercial registers, other than Agrokoncernas, other shareholders are not specified.

“We do not have the permission of other companies to release information on them to the public,” Agrokoncernas states.

Leaving debts to the Lithuanian business

The Belarussian company did not bring Agrokoncernas any profits over the entire 9 years. Quite the contrary, from 2009 to 2016, the Belarussian company’s debt to Agrokoncernas grew from 432.8 thousand euro to 1.04 million euro.

Agrokoncernas writes in financial reports that in Summer 2016, it gave Xoll Kemikal an interest free loan of namely 1.04 million euro. But already next year, in 2017, Agrokoncernas sold the Belarussian company’s shares.

While R. Karbauskis’ Agrokoncernas held the company since 2008, the shares were only declared in 2017. The Chief Official Ethics Commission clarified that shares were entered into the politician’s public and private interest declaration on February 21, 2017. By the way, the declaration, intentionally or not, has the company’s name misspelled. Based on the name given, no company could be found.

R. Karbauskis denies seeking to conceal his ownership of the shares in Xoll Kemikal, stressing that he declared when he had to and that he had little involvement in the business. A little later, through his press representative Dalia Vencevičienė, R. Karbauskis added that based on the law, he did not have any duty to declare the company in Belarus, also not declaring because a buyer for Xoll Kemikal was already found.

“As far as the member of Seimas is aware, the law sets out two ways how to declare companies. The law outlines a duty for the shareholder to declare his and their spouse’s companies, where they are shareholders. Everywhere else, where you are not a shareholder, there is no legal requirement to declare. However, there is another way, where the law allows an individual to declare other data, due to which they believe a conflict of interest can arise. Based on this, R. Karbauskis included companies, which businesses and individuals linked to him, including his wife and children, own due to which there could be a conflict of interests. The aforementioned Xoll Kemikal was not declared because on March 9, 2017, a deal had been made on selling the company. Since R. Karbauskis is not participating in the business, decisions on investment, company growth and such are made by the company heads. R. Karbauskis encourages to pose questions linked to business to the heads of the companies,” the written response states.

Experts: business in Belarus is important information for voters

The head of the Lithuanian branch of Transparency International Sergejus Muravjovas sees matters differently, according to an interview with the LRT Investigation Department.

“In my opinion, politicians must particularly focus on transparency. We have to know, what interests they have, what businesses they control and it is especially important when we are talking about people, who had businesses when entering politics. Coming to politics from business. Because otherwise, doubts can arise if they are correctly managing their interest,” he says.

Political analyst Marius Laurinavičius concurs, noting, “Belarus is akin to a Russian satellite. I have long ceased to call it an independent state. And if Russia poses a threat, if we agree that Russia can pose a threat (and few try to dispute this), then we should take action. There are a number of analytical studies, which show how influence is exerted through business. If it is a threat, it must be regulated by the law. If you have anything there, it matters not, what sort of links they are. All your links must at the very least be declared. I believe that a person coming to politics from business should overall break off any links that could threaten the state.

Company in Belarus is a sore spot for Agrokoncernas

The LRT Investigation department sought to speak to Agrokoncernas director Edgaras Šakys regarding activities in the neighbouring country, however he refused to speak in front of cameras. He agreed to only speak of the business in Belarus unofficially because apparently there is nothing to tell. Furtheremore, the business in Belarus is a sensitive topic for the group.

Apparently, Agrokoncernas has been operating in Belarus for several decades, exporting goods to the country and importing Belarussian fertiliser.

A good decade ago, their roads coincided with Belarussian Viktor Stepanovich Puchinec, who earlier worked in the Baranovich based detergent factory Barchim. After departing it, V. Puchinec established Xoll Kemikal, to which Agrokoncernas invested.

From a group controlled by A. Lukashenko to Xoll Kemikal

The LRT Investigation Department’s sources in Belarus say that V. Puchinec’s links to Lithuanians were established even before Xoll Kemikal was established. Back when Agrokoncernas’ future business partner still worked in Barchim.

Initially he managed the welding electrode workshop (the factory no longer deals in this). The electrodes were purchased by Lithuanians. From 1996 to 2003, V. Puchinec led the factory. In the year 2000, the situation in Barchim deteriorated: demand for the factory’s goods declined, thus it was decided to transfer the factory to the Belarussian state oil and chemistry group Belneftekhim.

Xoll Kemikal was founded in 2003 and V. Puchinec took charge of it.

By the way, the Belneftekhim group, which later obtained Barchim, was under US sanctions between 2007 and 2015. George W. Bush’s administration froze the Belarussian state group’s accounts because the group was controlled by Aleksandr Lukashenko. The group also owns the factories Grozno Azot and Gomel, from which Lithuanian business also imports fertiliser.

When V. Puchinec established Xoll Kemikal, sources say that a number of Barchim staff followed. Apparently, V. Puchinec did not invest into purchasing the factory’s equipment and instead forcibly written off equipment from Barchim became its basis.

Aiming for granulated fertiliser

When Agrokoncernas obtained Xoll Kemikal shares in 2008, its goal was to granulate fertiliser themselves. The raw material (potassium chloride) was to be obtained from Solihorsk. A. Lukashenko’s group Belaruskali operates there. Salihorsk features one of the largest fertiliser raw material reserves in the world.

However, Agrokoncernas assures that the deal with the fertiliser supplier did not pan out: “There was an opportunity to obtain the raw materials, however the activities became difficult due to changes in their pricing.”

The head of Xoll Kemikal, V. Puchinec was also rather reticent when called by phone. He vaguely mentioned that cooperation with Agrokoncernas started because the company needed cheaper raw materials from Russia after its founding in 2003.

“It [the cooperation] was purely due to the raw material. It became economically unviable for us because we were not provided Belarussian raw material and importing from Russia… with that, it somehow was cheaper at the Lithuanian border,” the director general of Xoll Kemikal vaguely spoke.

However, Agrokoncernas assures that it did not import Russian fertiliser, instead buying from Uzbekistan, but the product turned out to be of poor quality.

There was no more experimentation following that.

However, why did Agrokoncernas maintain hold of the unprofitable and indebted company in Belarus for almost a decade? And why did the politician’s business not cease dealings with it until only shortly after the elections, which proved successful for the “Farmers”?

Agrokoncernas assures that it sought to sell off the fertiliser factory’s shares for a number of years, but was unable to.

Export directions – hot spots

Currently, Xoll Kemikal deals in fertiliser production and trade. It offers liquid fertiliser, compound (NPK) fertiliser and also produces various chemical products: liquid and dry cleaning chemicals.

Xoll Kemikal declares that among its main importers is Iraq-based CONSTANTcompany and Afghanistan-based Yasin Masoud Textile Manufacturing Company.

However, Agrokoncernas assures that these export directions only appeared after their withdrawal as joint projects with Russia.

Agrokoncernas’ shares of Xoll Kemikal were purchased by the Belarussian trade and production company Elviva. According to registry data, 100% of Xoll Kemikal shares were obtained by Elviva last June and its deposit capital in Xoll Kemikal comprises 76 thousand Belarussian roubles [31.7 thousand euro].

Elviva is also the holder of the trademark Mir Gruntov. In other words, Xoll Kemikal produces microelement fertiliser for the Moscow-based company Mir Gruntov.

Belarussian company head: the Lithuanians just “had” us

V. Puchinec was also uninclined to speak of his previous business partners, only laughing that, “They only “had” us and that’s all.”

He was uninclined to go into details, only commenting that during Agrokoncernas ownership, the company dealt only with fertiliser. V. Puchinec also mentioned that the produce was never imported to Lithuania, nor was he himself ever granted a visa to enter the country.

With V. Puchinec refusing to give a phone interview, the LRT Investigation Department offered to visit and meet in person. When colleagues in Belarus contacted him, the head of Xoll Kemikal was even more irked, stating that he has no time for it and that journalists are not investigators, to ask him. V. Puchinec only briefly explained that the company will not operate until March next year because it is winter.

The LRT Investigation Department found this to be true. The factory’s doors were closed during working hours and it appears that no manufacturing is ongoing inside.

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