Bakai - Didenko Arrested in Zherditsky-Hradobank Case of Not Paying Nazi Slave Labourers - KP - 26Jul01
Stefan Lemieszewski
Kyiv Post
26 Jul 2001
Ex-Naftogaz head nabbed in Germany
By Peter Byrne, Kyiv Post Staff Writer
German law enforcement authorities arrested
the former head of Naftogaz Ukrainy on July 14
in connection with the disappearance of $38
million intended to compensate former slave
laborers. Ihor Didenko was arrested in Frankfurt
shortly after arriving on a flight from Milan, Italy.
Hanover state prosecutors said the 37-year-old
Ukrainian was being held in connection with their
investigation into the disappearance of money
earmarked for Ukrainians forced to work as slaves
in Nazi Germany. German prosecutors have spent
four years trying to figure out where the money
went.
Didenko's arrest is connected to the detention of
Ukrainian parliament deputy Viktor Zherdytsky last
October. Zherdytsky, the former president of
Gradobank, remains the prime suspect in the case
according to German investigators. Police arrested
the lawmaker after he withdrew $50,000 in cash
from a Hanover bank.
Didenko's arrest is the latest twist in a complicated
case that illustrates the inability - or unwillingness -
of Ukrainian authorities to investigate allegations
against the nation's political and business leaders.
Didenko's biography, compiled from published news
accounts, resembles that of many up-and-coming
Ukrainian capitalists. He came to Kyiv from a small
town in Vinnytsa oblast to study at Taras Shevchenko
University. After receiving a degree in computer
science in 1986, he worked two years at the Kyiv
Radio Factory, where he distinguished himself as a
basketball player and a Komsomol functionary.
When the Soviet Union collapsed, Didenko went into
business for himself, eventually founding an investment
company.
Gradobank teamed up with Didenko in the mid-1990s
to make loans and acquire equity in Ukrainian cement
factories. The partnership was initially successful, with
Gradobank becoming one of Ukraine's top commercial
Banks by 1995.
Boosting the bank's collateral that year was former
Deputy Prime Minister Viktor Pynzenyk, who authorized
Gradobank to act as an agent for more than half of the
$178 million in German compensation payments for
Ukrainian Nazi victims.
Michael Buckup, a spokesman for the Justice Ministry
of the state of Lower Saxony, told Radio Liberty in
November that Zherditsky owned an apartment in
Hanover. He says that, as chairman of Gradobank,
Zherditsky set up corresponding accounts at a branch
of HypoVereinsBank in Munich, and branches of
Deutsche Bank in Hanover and Frankfurt.
But by 1997, following a bitter, costly and protracted
battle with a foreign investor for control of
Mykoliyavtsement, Ukraine's second-largest cement
producer, officials detected that Gradobank had stopped
sending money to Nazi victims.
Ukrainian prosecutors froze the bank's Ukraine
accounts and launched an investigation. Law
enforcement authorities also requested help from
justice officials in Germany, who later alleged that
Zherdytsky and Didenko had set up bank accounts
in Hanover, Munich, and Frankfurt, which German
officials allege were used to divert compensation
money abroad.
For three years German investigators followed the
circuitous trail of money transfers designed to move
$38 million from the compensation fund, according
to German investigators, who told Radio Liberty in
November that banks in New York, Prague and
Limassol, Cyprus as well as companies in England,
Luxembourg, and Belgium were allegedly used by
Zherdytsky - and possibly Didenko - in an elaborate
embezzlement scheme.
While German investigators were sorting out phony
companies and tracing numbered accounts, NBU
governor Viktor Yushchenko agreed in 1998 to
advance Gradobank a Hr 5 million loan using the
bank's art collection, worth $5.15 million, as collateral.
The scheduled auction of the paintings, which included
a work by Picasso, was subsequently canceled. NBU
spokesman Dmitro Rikberg told the Post in 1999 that
"it should have taken place, but didn't."
Meanwhile, Didenko got busy with bigger and better
endeavors, like managing Ukrnafta, Ukraine's largest
domestic producer of oil. Control over UkrNafta was
assumed by Naftogaz Ukrainy in June of 1998, and
Didenko became first deputy to Naftogaz Ukrainy's
enigmatic chairman, Ihor Bakai, whom President Leonid
Kuchma tapped to manage Ukraine's national network
of oil and gas pipelines and the 30 billion cubic meters
of gas Ukraine received annually for pumping Russian
natural gas supplies to Europe.
Didenko succeeded Bakai as acting chairman of
Naftogaz last March, nearly a year after Ukrainian
prosecutors detained and questioned Didenko about
his business deals with Zherdytsky at Gradobank.
Following his dismissal as Naftogaz chairman last
June, Didenko remained "an accessory to the
Zherdytsky criminal case," said Deputy General
Prosecutor Mykola Obykhod. He did not specify
what, if any, offenses Didenko was suspected of
having committed, noting only that Didenko had
signed a bond not to leave the country.
Now both Didenko and Bakai are being investigated
in connection with another criminal investigation - this
one launched by tax authorities last May. According
to Ukraine's top tax policeman Oleksandr Spiridonov,
Naftogaz allegedly evaded more than $145 million in
taxes. Spiridonov said an audit showed that Naftogaz
Ukrainy had failed to pay taxes on its profits since it
began operating in 1998.
The allegation lends credence to a conversation
secretly recorded in Spring 2000 by a presidential
guard. The tape, aired by Radio Liberty earlier this
year, includes a conversation ostensibly between
State Tax Administration chief Mykola Azarov and
Kuchma.
In the exchange, a voice resembling Azarov's says:
"About Naftogaz. As we agreed, I met with Bakai to
discuss the accounting schemes, the ones my guys,
people whom I trust, worked out. After talking with
Oleksandr Mikhailovich [Volkov] beforehand, I told
Bakai the following. 'Listen little Ihor, you put a
minimum of 100 million in your pocket. I understand,
of course, and won't betray you. You have two weeks,
a month maximum ...'."
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