Wife of Ukraine president-elect got penthouse bargain from tycoon

The wife of Ukrainian president-elect Volodymyr Zelenskiy bought a luxury apartment for less than half the market rate from business tycoon Oleksandr Buryak, according to official income and property records.

Zelenskiy, a comedian and TV star with no political experience, won the April 21 presidential election after campaigning as someone who stands apart from the wealthy elite that dominates Ukrainian business and politics.

But the deal over the apartment — in the upmarket “Emperor” complex on the Black Sea coast — indicates that Zelenskiy’s family has benefited from a transaction with a member of that same wealthy elite.

Reuters was unable to establish why the apartment was sold at below market prices. Neither Zelenskiy nor his wife responded to requests for comment submitted via his campaign team and via companies he co-owns.

In a statement issued after Reuters reported the apartment deal, Zelenskiy’s campaign office said all Ukrainian taxes and fees had been paid and that the property had been declared in line with the law.

It also said that the apartment’s price had been consistent with the then market level, without explaining why it believed that to be the case. It did not immediately respond to questions about the apparent discrepancy in price.

Buryak, the businessman who, according to public property register documents sold the apartment, declined to comment on the apartment when Reuters contacted him by telephone, and did not respond to written questions.

Zelenskiy’s wife, Olena Zelenska (photo, left), bought the three-room penthouse apartment on Ukraine’s Crimea peninsula for US$163,893 in April 2013, according to the declaration of income and assets filed this year by her husband, and the Ukrainian property register.

For the purchase, made the year before Russia annexed Crimea, she paid the equivalent of about US$1,263 per square metre.

A 2012 listing published on Ukrainian real estate site domik.ua put the price for an apartment in the Emperor complex in a range of between US$3,500 and US$4,000 per square metre.

A second listing for the same building, published in 2012 on the indoor-estate.ru site, gave the minimum price as US$2,800 per square metre.

A Crimea real estate agent, who spoke on condition of anonymity, confirmed that apartments comparable to those in the Emperor complex usually sold in 2013 for between US$2,500 and US$3,000 per square metre, but could go for up to US$5,000.

Buryak is a former member of the Ukrainian parliament who, with his brother Sergei, was controlling shareholder in Ukrainian lender Brokbiznesbank from at least 2010 until they sold the majority stake in mid-2013, according to data from Ukraine’s securities and exchange commission and a disclosure statement from the bank.

Unnamed former Brokbiznesbank executives are under criminal investigation on suspicion that they embezzled money from the bank starting in 2012, according to court documents filed by prosecutors.

As part of that investigation, prosecutors seized the assets of two companies suspected of benefiting from the alleged fraud, court documents show.

Both firms, Seredynetske and Svarog-Bukovyna, are owned by Oleksandr Buryak and were owned by him at the time the alleged fraud took place, according to the official Ukrainian register of company ownership.

Buryak did not respond to questions about the investigation. Reuters could not independently confirm if he is being investigated. A representative from Svarog West Group did not immediately respond to a request for comment. Seredynetske and Svarog-Bukovyna are parts of Svarog West Group.

Wealthy associates

Zelenskiy’s opponents accuse him of being a pawn of Ihor Kolomoisky, one of Ukraine’s richest men whose media company has worked closely with the comedian’s TV production business. Both Zelenskiy (photo below) and Kolomoisky deny the president-elect is under the tycoon’s influence.

Kolomoisky told Reuters he believed Buryak sold the apartment to Zelenska cheaply because his bank was short of liquidity and he needed to raise cash quickly. He did not offer evidence to support that claim.

The Ukrainian central bank declared Brokbiznesbank illiquid on Feb 28, 2014, 10 months after the apartment sale.

In November 2013, six months after the apartment was sold, Ukrainian ratings agency “Expert-Rating”, in a report published on the Brokbiznesbank website, said the bank’s finances were robust and its liquidity was significantly above the average level for the sector.

Buryak volunteered for Zelenskiy’s election campaign this year, according to data from the election commission. He was delegated by the campaign to monitor vote violations on polling day in Kryvyi Rih, Zelenskiy’s home region.

Prime real estate

Guarded by a pair of stone lions either side of its entrance, the Emperor complex sits in thickly-wooded parkland overlooking the Black Sea in the Crimean resort of Yalta.

Next door is the Livadia Palace, where US President Franklin D Roosevelt stayed while attending the Yalta conference with Soviet leader Josef Stalin and Britain’s Winston Churchill at the end of World War Two.

Zelenska is given as the current owner of the apartment in the Ukrainian property register.

Her apartment was listed for sale with the Prichal 82 real estate agency in April at a price of US$790,668, more than four times the purchase price in 2013 or the equivalent of US$5,195 per square metre.

- Reuters