Korban Hennady

Korban Hennady

Childhood

I was born in 1970, on the 24th of May, in Dnepropetrovsk city, in Jewish family. My parents are common Soviet engineers; they worked at factories. I have a full sister, she is 8 years older than me, she was born in 1962. We’re very close, we are good friends. In 1989 she and her family emigrated to Israel.

My father’s relatives are of Riga descent, in my childhood I often travelled there. We lived near old Riga. As a child, I went to Dome Cathedral and listened to organ music. It’s educating the ear and it’s simply beautiful.

In Dnepropetrovsk I went to kindergarten, then to school. In general, I was a good pupil. It may be that I was not always prepared well for lessons, but still I was a good pupil.

In 1987 I was through with the secondary school and tried to win a studentship in Philosophy in Rostov-on-Don. Together with my mother, we went there to submit application, and I was asked to provide a reference from a party body. This was because philosophical faculty was considered to be ideological one. We did not know about such a procedure and obviously they refused to accept my documents. We had no communists in my family, and there was no way I could get such a reference letter. That is why we came back to Dnepropetrovsk and I entered the metallurgical institute.

Why did I want to be a student in Philosophy? From an early age, I loved reading and read many philosophical works, for instance, Hegel, Nietzsche etc. I liked that. Apparently, it was not meant to be. Though at the metallurgical institute I was not around long. I studied there for a year and dropped out of it, I just understood it was not really for me.

Army

In the fall of 1988 I was drafted into the Soviet Army. I served for 2 years in military transport aviation, in air guards unit in Melitopol. I was a common soldier, carrying rounds. Though it was aviation, soldiers did not fly, only officers did. We were responsible for repairs, kitchen shifts and other duties…

At that time the Nagorno-Karabakh conflict broke out and our unit was handling the transfer of amphibious units from Pskov to the conflict’s zone. We saw it all happening: either evacuees, or soldiers, who had participated in this conflict. While serving in the army, I also witnessed the withdrawal of forces from Afghanistan in 1989.

Moscow

In 1990 I left military service and went to Moscow to enter the Maxim Gorky Literature Institute, the drama faculty. There was a large entry, but I was accepted. But effectively I did not study. It was such a bad time then, year 1991. I had to live somehow; I did not want to live by preying on my parents. Thus, I decided to try my hand at business. I started to work in the cooperative, where my father worked. I convinced them to buy a place on Moscow Commodity Exchange. I worked there for a year, but I did not earn a lot. Some peanuts, commission fees. However, that's where I learned to make money. An exchange broker is acting on behalf of another person and at the expense of another person. There are some commodity flows, supplied by producers to exchange floor. One of them is selling and the other one is buying. And for the benefit of a client you’re buying or selling, and you receive a commission fee for every closed deal.

Collapse of the Soviet Union

In 1991, the breakup of the Soviet Union happened. I remember us sitting in the office of the cooperative, where my father worked, and reading news from teletype. This is a huge machine, where you can print telegrams, it printed out different news. And this was our way to follow occurring events, as teletypes were broadcasting unbiased news. Everyone was watching ballet on television, and on teletype somebody broke through and wrote something. It was less controlled.

Business. The beginning

After the collapse of the Soviet Union I returned to Dnepropetrovsk and went into business. This was year 1992 already. While working on the exchange market, I understood that I could earn more by buying and selling by myself, rather than operating as a broker. When USSR broke up, all trade and economic relations crumbled at once, centrally planned economy collapsed in half a shake. Each country introduced its own currency value. But cross rates were not defined, there were no payments in dollars, nobody could understand what the currency was and how it looked like. A commodity was the only measure. That was time of exchange transactions, barter trade. And I started to carry out such operations: for instance, I was buying oil packaging materials at Rakhov paperboard plant (these were special stable cardboard boxes) and took it to the Baltic states. There I exchanged them for butter, took it to Azerbaijan and exchanged for air conditioners. In Azerbaijan they had a shortage of butter and in Ukraine there was a tight supply of air conditioners. One could earn cosmic money, when conducting such transactions, for example 2000%. That's how I gained my first serious capital.

Higher education

In 1994, I entered the Mining Academy and graduated from it externally with a specialization in Finance and credit. But those studies were absolutely academic. Back in that time, the economy taught by lectures was a soviet one. And at that moment it did not exist anymore. It was political economics rather than market-based one. The country was developing; everything was changing so drastically. But higher educational institutions had no competent professorate and personnel. They could not adapt their existing practice. That is why they taught something, with no relation to real life and business practice. I can even remember my graduation work; it was a complete “sovok”, even though without soviet terminology.

Privatization

In the same 1994 the Law on in personal privatization was passed and I founded investment firm, which started to buy privatization certificates. It was named “Slavutich-capital”. We bought privatization certificates and invested them into shares. And in 1998 crisis broke out in the post-soviet states. Everything came crashing down, and our shares turned into trash.

Mergers and Acquisitions

In 1999 Lev Chernoy invited me to help him with regard to privatization of Nikolaevsk alumina refinery plant. Hard battle broke out for this plant. It was the only one in Ukraine to produce raw materials for aluminum industry and was one of the major alumina refinery plants within the territory of the former USSR. Chernoy brothers were competing for it. The plant’s major shareholding (over 60%) was state-owned, over 25% were owned by the plant’s director, and the other shares were on the stock market. Obviously administrative resources were in use there, but I did not understand that, it was agreed on a higher level. I was managing this project as a vip-manager – I was taking care of legal questions, handling equity capital, business administration. This was quite a complicated complex. This was where I gained my first experience of managing big business. I was acting mostly by intuition, as I had no similar experience at all. We had the Russian people from Krasnoyarsk in our team – those who used to manage aluminum plants before. They were well experienced, so I had people to be taught by. In a year we ended up with failure. Deripaska stepped into the conflict and through Yaroslavsky they reached an agreement with Kuchma on control over the plant.

Basically this is how I started dealing with mergers and acquisitions. As I’ve already mentioned, I had shares and privatization certificates, which in 2005 began to rise in price again. A friend of my was saying in joke: “You own 1% of the whole country”. And then I started to independently practice mergers and acquisitions. I’ve been everywhere, from coke processors to metallurgical enterprises, regional power distribution companies etc. It’s even hard to calculate the exact number of the projects: the coke processor named after Kalinin, the plant named after Petrovsky, Bahleysk, Dneprodzerzhinsk coke processors, Yuzhny mining and processing complex, Inhuletsk, Tsentralnyi mining and processing complexes, enormous number of regional power distribution companies, from Odessa to Dnepropetrovsk; Ukrtatneft, Ukrneft, Odessanefteprodukt. Everywhere my task was to streamline and adjust business processes.

Is it necessary to understand specific aspects of manufacturing to be able to manage them effectively? Definitely it’s essential to have this expertise. But one won’t need much time for that. For me two weeks are enough to dive deep and understand where there are issues, what is working effectively and what is not. And if there’s a need to close up, if it’s impossible to enhance efficiency.

The Privat Group

Kolomoysky and I know each other since the late 1990s. In 1999 we started to work together. At that time the holding company “United energy systems of Ukraine” began to fall apart: Lazarenko emigrated, Timoshenko appeared to be in disgrace. Their third partner was Aleksandr Hravets, but people knew a little about him. And if I can say so I was on warm friendly terms with him. Hravets was directly managing manufacturing enterprise. And when their collapse began, he sold his shares to the Privat group. As of this moment acquisition project of Yuzhny mining and processing complex started. Effectively this was a conflict with Timoshenko and Novinsky, who owned some shares as well. The privatization rate of Yuzhny mining and processing complex accounted to 75%, these shares were dispersed between different stakeholders, with 25% more having been held by Ukrrudprom.

In 2001 I was already occupying the office of Chairman of Supervisory Board of Yuzhny mining and processing complex. And generally speaking I was holding this position up to 2010. But effectively I was managing Yuzhny mining and processing complex during the first year and a half. Everything is very simple there: you mine and you sell. You can sell ore minerals for export, or you can concentrate it and sell to metallurgical complexes. This is very simple, you just need to keep an eye on internal optimization and theft.

That was also when I met Vilkul. He was holding the position of deputy director at the mining and processing complex. By that time he had been working at mining and processing complexes and managing there together with his father for a good while. Hravets told me that they were not really clean guys. In 2001, when we entered Yuzhny mining and processing complex, I called him without hesitation and told: “Woud you, Sanya, get out of here?”. He left and appeared to work with Akhmetov then. Later on we came across each other, when the conflict over Tsentralny and Severny mining and processing complexes was in progress, he was ruling them at that time on behalf of Akhmetov. A lot of things followed mining and processing complexes. In all the projects my main challenge consisted in merger and acquisition, initial management. After that I passed control to project managers.

I have my own business, related to real estate – hotels, shopping centers. I invested into real estate in Dnepropetrovsk, Kiev, I had real estate in Crimea. I keep on working on international stock exchanges; I’m quite good at capital movements. Moreover I’m a supervisory board member at Ukrneft and Ukrtatneft.

Assassination attempts

The first attempt on my life was in 2006. It was due to the conflict over Ozerka market. In reality nobody was interested in that business. But that was a matter of principle. At that time the governor Yatsuba let Kurochkin in the city, and they all, a herd of thugs, straight by train from Moscow run in Ozerka. This conflict lasted for many years. As a result we won. And in the end there happened this history with attempt.

In general there were two attempts. And two friends of mine were killed. But I’m alive. The second attempt happened in 2010. I roughly understand, whom to blame. But it’s not yet time for revenge.

I believe a danger is still valid. Maybe a number of contractors is even bigger now. When we were at the regional administration, entire units came to blow us up; they had been caught with grenade dispensers. At least six units had been caught.

After the first attempt in 2006, I do not usually visit public events, clubs and restaurants. Politics, taking into account its spotlight, complicates life. This is one side of the coin. On the other side, it protects. Unless it’s a political put-up job. But I don’t think this can refer to me. Most probably, they can order a hit for some old business. In this case politics and publicity ensure protection, granting a kind of immunity for a time.

State administration

Power is entirely different type of management. During the first sessions at the regional state administration, I could hardly understand what they all were talking about. I was listening very carefully and mostly kept silent, I was afraid to seem stupid. But then little by little I started to gain insight. The fact, that I’d never been afraid to ask, helped me. Sure I did not do that in front of everybody, but at the right time I pulled out a person, responsible for a particular industry, and asked him of the points, I did not understand. This referred to finance, housing services and utilities, social protection, medical industry. Budgeting is the most difficult part. You need to be proficient in it, one can deceive here hands down. Experienced officials are so good at juggling with numbers and budget codes, that it’s almost impossible to catch them red-handed.

I needed more time to get into government control than it was in case of business administration. Effectively during my whole work at the regional state administration, I was learning something. When something new emerged, I carefully asked either this or that person. I made them draw different charts and diagrams for me to have more visibility. Further a sense of this process came in. When it happens, no one can cheat you anymore – if someone flogs something to you, you feel and understand it straightaway.

We were really tolerant in treating all the questions, we did not perform any sudden movements. As we were in rather uneasy circumstances. The regional council was fully controlled by the Party of regions and could express distrust to the governor at any moment. In this case everything would come apart.

Dnepropetrovsk’s defense

As of the 10th of March separatists started assaulting the administration. There were at least 3 assaults, we had to adopt immediate and rather tough actions. As a result, we had bought one-way tickets for all who wanted to go to Russia. And in a while Dnepropetrovsk turned into a city of an absolute patriotism in a natural way, without any particular pressure from our side. Simply we managed to infect people with patriotism.

Then the war broke out. We were the first in the country who received an order to build up a volunteer battalion. After that, we had built up several more volunteer battalions under the authority of the Ministry of Internal Affairs, and also 4 area defense battalions under the command of the Armed Forces of Ukraine.

We hired military engineers, we made the reconnaissance and the intelligence gathering in two regions, namely Dnipropetrovsk and Zaporozhe, which were located on the boarder of the anti-terror operation zone, and started the process of building up three defense lines. These were the basic lines for artillery and heavy army, which protected Dnepropetrovsk and Zaporozhe regions; it was a so-called deep defense. Furthermore, we built defense lines in 4 districts on the territory of Donetsk region, which we had taken under our control from the beginning and from where we had knocked out the Donetsk People’s Republic.

In Dnepropetrovsk region we made over 100 checkpoints, equipped with CCTV systems. Its signal was broadcasted directly to the command post, built at our own cost, in the Southern Command headquarter. The Security Service of Ukraine and the Ministry of Internal Affairs in the region were also able to receive this video signal, for this reason not a single act of terror happened in Dnepropetrovsk region during the anti-terror operation.

We had everything ready for the defense of the city and the region. We even had a support division in place for purchasing all necessary resources. Many private investors, even international organizations began to make donations. The fund had been established, through which we paid for everything, from helms and thermal underwear to infrared scanners and drones. Primarily we equipped area defense battalions with all these things; we had four of them, created in Dnepropetrovsk region. And around 4 area defense battalions under the command of the Ministry of Internal Affairs, plus the Right Sector’s volunteer corps. We carried injured people, built logistics at the airport, kept ready helicopters and if necessary evacuated even one person from the anti-terror operation zone. During high-intensity army actions, we ordered helicopters off the ground at 3, and 4, and 5 am.

We trained five thousand reservists, with each of them being equipped with a full ammunition. If needed, we were ready to activate a defense system within the shortest possible time. We were writing mobilization orders in case of danger; the Swiss system was taken as an example. Maybe we did not manage to do everything in such an orderly, consistently manner, but we did all we could, and even more.

Politics

I’m not going to be in politics till the end of my life. A couple of years ago I did not think of dealing with it at all. Everything changed when the conflict with Poroshenko started. Probably a kind of ingratitude prompted to act and try myself in politics, under my own stream. But I’m not willing to be engaged in this for my whole life, I’m not going to cling to power tooth and nail. It makes sense for me to attain power only with a target to do the work, which I’m used to do.

I see my role in taking care of all this, fixing it and handing over to young generation. Now we’re witnessing the crisis in my country. And I’m a crisis manager, rather effective one. I understand how it’s all functioning. I am ready to reset the situation, restart it; to break something, to retarget something and to bring something new.

How much time is required for that? Not more than 7 years: two years for attaining power and five years in power. That’s all! By no means I’m going to stay longer. I should be replaced by people able to streamline, automate it and work normally in public administration system under relevant material incentives.

“To make history” – it sounds very snobbishly. I don’t like it. History makes its own heroes. It’s just that you have a desire to have something to be proud of and tell your grandchildren late in life. And that’s all. It’s interesting to explore this field. I’m really a good manager. I really have the skills and know how to do this manually. And then young generation should come, it’s their right. I really mean it. I truly want people, who did not grow up in “sovok”, to come to power. I see young people, born in between the early 1980s and the late 1990s. These are radically different people, this country’s future belongs to them. And my aim is to make way for them, turn on means of social mobility, and then let them start working.

Patriotism

As a child, I could hardly understand the difference between Russia and Ukraine, for obvious reasons. As I was growing up in the shared apartment, my father often told me: “Hurry up and eat, because soon the Chinese will come and they will commit hara-kiri to us together with our neighbors”. I could not understand what it had to do with our neighbors, till I attained particular age and started to understand the meaning of popular antisemitism. Frankly speaking, I did not come across it that often. The situation in Ukraine was always better with this regard. However I’ve never loved Russia. I hate Moscow, especially after having worked there for a year. And it’s a nightmare outside the city. I would never go to live in Russia. It’s a wild and uncivilized country.

Basically I have never thought of living abroad. Ukraine has always been a very comfortable country for me. I felt myself like a Ukrainian citizen. And I had not this bitter feeling, which came to me a year ago: it’s when you understand that your home and comfort zone, where you used to live for many years, can be taken away. You start to suffer from this. I got a feel of this at the moment, when in Donetsk and Luhansk all this had broken out. Yes, until then I understood that this was my home, I felt well and comfortable there. But I did not appreciate it much. And after the events in the Donbass region a feeling of loss came, as if you were losing your loved one. Every day I imagined the train from Donetsk arriving at the railway station with all these scary people and a true terror stole upon me. A fear of losing all this in no time came up: my comfort zone, my office with a view of the esplanade, people, whom I know for ages. Moreover my parents live in Dnepropetrovsk. They are very seriously ill. Yes, they moved to Israel, gained citizenship, lived there for a while and returned. They do not want to go there anymore. I can live in any spot around the world, though I do not consider this option since my home is here, in Ukraine.

Children

I have four sons. My first-born is 24 years old. I look at him and understand that he is not like me at all. He is a citizen of the world and is far from being religious. He is a person of another generation, being out of step with “sovok”.

I do not have any dream concerning my children. You know, it happens that some parents dream: I want my son to become a doctor or a lawyer. I don’t feel like this. The only thing I dream of is that they beat me. And also I dream of having a daughter.

Hobbies

I’m good at modern art, modernism. I started to be interested in it as of the late 1990s. First it was at amateur level. I had sly antiquaries coming to me and trying to flog something, with them describing it with such flying colors. When you understand that somebody wants to make something off you, a desire to look into the matter springs up. And this is what I actually did.

I do not get along with academism very well and I do not like it much, as primarily academism covers religious or mythological subject in paintings, prevailing during the Renaissance, and historical portrait as well. All this seems rather boring, unlike the modernist period – it falls in my way, I’m good at it. You can show me paintings of this period and I’ll name an author and time of his oeuvre.

I have a private collection of paintings. It’s mostly located in Geneva and international museums. You can call it both a hobby and a way of investing money. I sell some pieces, follow auctions and I’m accredited by all known auctions.

Lately I have been reading a little. But before I used to read a lot. I love Henry Miller, writers of the lost generation – Hemingway, Faulkner, Fitzgerald, Remarque. Bunin is one of my favorite ones, he is extremely lyric. I love reading science corpus, for instance the Strugatsky brothers.

When a child, I delved into the chess, I have a high category. To tell the truth, currently I put little time into this. As for now, I’m playing another kind of chess. 

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