Former Finance Minister Who Resigned Was Suspected of Fraud Even Before Appointment

Former Finance Minister Who Resigned Was Suspected of Fraud Even Before Appointment

Igor Umannsky, who lasted in his post for only 24 days and resigned on 29 March, is the subject of a number of questions from the United States of America.

45-year-old Igor Umannsky has held high-level positions under every administration: under Kuchma, under Yanukovych, and under Poroshenko. At one time he was acting Minister of Finance of Ukraine after Viktor Pynzenyk’s resignation in Yulia Tymoshenko’s second government, and he also served as presidential adviser of Ukraine from 2016 to 2019.

However, just days before Umannsky’s appointment as head of the Ministry of Finance, the outlet Komentari published an investigation noting that certain troubling facts from his biography should have been taken into account. In particular, it mentioned Umannsky’s close ties with businessman Timur Khromaev and the activities of their affiliated company Gase Energy, which drew questions from the U.S. Securities and Exchange Commission. Umannsky is also accused of schemes benefiting oligarch Ihor Firtash and there are oddities in his own income declaration.

“In 2000 the then young and promising politician Igor Umannsky became a notable civil servant after getting a position in Viktor Yushchenko’s Cabinet,” the Komentari investigation reads. “There were still four years until the Orange Revolution; the appointee himself had experience only at the National Agency of Ukraine for Development and Eurointegration, and a couple of years as an expert (he worked in the office of the deputy prime minister for economic affairs). For almost six months Umannsky worked in the group of advisors to the minister of economy, then moved to the Ministry of Economy. There the young specialist was hired by the Department of Structural Policy, but a little over a year later Umannsky became deputy secretary of the Ministry of Economy and Eurointegration.”

During this period the official made a highly useful acquaintance with the head of the capital markets department in the public debt department of the Ministry of Finance — Timur Khromaev. Khromaev did not stay long in government, moving into business, but that contact was enough to establish close ties and cooperation. Khromaev himself in 2015 took the important position of head of the National Securities and Stock Market Commission. At the same time Umannsky served as deputy minister of finance of Ukraine, and Minister Oleksandr Danyliuk openly said that Ihor Kononenko had helped secure the deputy’s appointment.

“Oligarch Dmytro Firtash also reaped the benefits of Umannsky’s activities,” the outlet emphasizes. “In 2010 the official, who was listed as acting minister of finance, proposed canceling the resolution to transfer the assets and liabilities of Nadra Bank to another financial institution — Rodovid Bank. As a result, Firtash quickly bought Nadra, and the bank entered a less than stellar phase of its existence. Some time later the joint enterprise of Umannsky and Khromaev was revealed — their link was exposed by connections between their own companies, which today is not hard to trace.”

Interestingly, despite holding high positions, Igor Umannsky had a large debt to one of the banks. However, he was not in a hurry to repay it. Thus Ukrsibbank, to which Umannsky owed 67,9 thousand dollars, went to court. A strange situation for someone who wants to remain long in Ukrainian politics, isn’t it? But, as we see, Umannsky did not seem very concerned about his reputation.

Another touching and peculiar fact is revealed from Umannsky’s declaration. He himself has no completed house to live in, because his house is unfinished. Yet his one-year-old daughter owns an apartment. That is where Ihor Ivanovych lives.

From the 2018 declaration it is also visible that Umannsky keeps the company Gase Energy (formerly known as Epsilon Corporation) on his records, though he mentions it under its old name. This firm was spotted among the founders of Bezerius Holdings Limited. Khromaev, as a civil servant, was forced to disclose this company in his own declaration. That is how journalists uncovered the first link between the old partners in public service at the time. They also found, according to YouControl data, that the company was founded in Cyprus.

This business is not clean.

“At the end of 2013 the company filed financial statements as required by U.S. law,” Komentari reports. “Employees of the American Securities and Exchange Commission noticed that the Ukrainians attempted to ‘invent’ larger gas reserves on paper than actually existed. It all ended with American sanctions.”

The Americans notice everything. That Gase Energy, before changing its name, was domiciled in a building formally occupied by other firms. That the company’s staff with an incredible turnover consisted of only a few people. That the subsidiaries of the creation of Umannsky and Khromaev owned two Ukrainian companies engaged in production and sale of natural gas (such as Lispromgaz and NPK-Kontakt).

“But our compatriots carried out the same manipulations that fictitious entities usually do: they did not correct reporting, they revalued their assets on paper, they did not defend their interests in courts. That is exactly what a fake status of a company implies — a company that is based in the U.S. but operates only in Ukraine, while its stepson meanwhile hid in Cyprus and participates in far from all transactions,” the investigation explains the essence of the scheme.

Today Igor Umannsky — a man who knows well about financial schemes and how to come out unscathed — is no longer the finance minister. He lasted only 24 days. Details of how he resigned will likely emerge quite soon. For now people say he did not fit into the new team because he did not attend meetings, worked sluggishly, and disrupted negotiations with the IMF. In short, professionally weak.

But the question is different: why was he entrusted with the country’s main “wallet,” knowing his tendency toward such schemes? After all, the compromising facts were obvious. And the main question — what next? What other positions and under which governments will Umannsky hold, who neither burns in fire nor drowns in water?

“Such people usually stay afloat under any government,” the authors of the investigation note. “Presidents change, their entourages form new camps, and only a universal component always fits into every mechanism along the way.”