Amstor
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Amstor Retail Team is a company which manages commercial properties in central and eastern
Ukraine Ukraine is a country in Eastern Europe. It is the List of European countries by area, second-largest country in Europe after Russia, which Russia–Ukraine border, borders it to the east and northeast. Ukraine also borders Belarus to the nor ...
.


History

Amstor was started by Ukrainian businessman Volodymyr Vahorovskyi. The first store opened in Donetsk on 28 August 2003. By 2008, 19 more Amstor stores had opened in eastern Ukraine. There were also 22 shopping centers under construction. In 2009, about ₴280 million (around US$30 million) was spent on the company's growth. On 20 December 2012, Amstor opened stores in Kyiv. On 25 October 2013, the first Amstor store opened in Dnipro. By 2014, the company had eight supermarkets in Donetsk, Makiivka, Sviatohirsk, and Yasynuvata. The 2014
War in Donbas The war in Donbas, or the Donbas war, was a phase of the Russo-Ukrainian War in the eastern Donbas region of Ukraine. The war Timeline of the war in Donbas (2014), began in April 2014, when Russian separatist forces in Ukraine, Russian para ...
stopped further growth. A fight between the main shareholder, Smart-Holding, and Volodymyr Vahorovskyi started in December 2014. In 2015, Smart-Holding gave over ₴150 million to keep 20 stores running in Ukraine. In July 2015, Smart-Holding and Fozzy Group agreed to work together to fix Amstor. Some Amstor stores now help small and medium-sized businesses. On 27 June 2022, an Amstor shopping mall in
Kremenchuk Kremenchuk (; , , also spelt Kremenchug, ) is an industrial city in central Ukraine which stands on the banks of the Dnieper, Dnieper River. The city serves as the administrative center of Kremenchuk Raion and Kremenchuk urban hromada within ...
was hit by a Russian missile.


Corporate conflict


Background

During the
2008 financial crisis The 2008 financial crisis, also known as the global financial crisis (GFC), was a major worldwide financial crisis centered in the United States. The causes of the 2008 crisis included excessive speculation on housing values by both homeowners ...
, Amstor was closed due to
insolvency In accounting, insolvency is the state of being unable to pay the debts, by a person or company ( debtor), at maturity; those in a state of insolvency are said to be ''insolvent''. There are two forms: cash-flow insolvency and balance-sheet i ...
. Business partners Shifrin and Vahorovskyi offered
Vadym Novynskyi Vadym Novynskyi (; born 3 June 1963
Liga.net
) is a Russian-born Ukrainian billionaire businessman, priest an ...
70% of Amstor's stock in exchange for working capital and restructuring the company's excessive credit portfolio. Novynskyi's company Smart-Holding provided a $3 million stabilization loan. In return, they each retained 15% of the company's stock. In 2009–2011, Novynskyi gave about $30.5 million to ''Amstor'', and Smart-Holding concluded suretyship agreements to $50 million under the company's loans with the banks. In 2012, Amstor's first supermarket in Kyiv was opened. Later, two more Amstors were opened there.


Conflict

In March 2014, Volodymyr Vahorovskyi, without the consent of Smart-Holding, founded Amstor Trade LLC. The name of the new company was almost identical to that founded with Smart-Holding's half a year prior. The only difference was the absence of a hyphen in the name. To fill up the capital of Amstor Trade, Vahorovskyi made several fiscal transactions. One of them, for instance, was the purchase of 'worthless' securities for
The hryvnia sign (₴) is a currency symbol, used for the Ukrainian hryvnia currency since 2004. In 2004, when the National Bank of Ukraine approved the ₴ currency symbol for the hryvnia, it was also stated that the symbol could be written eit ...
15 million from Lancelot by Amstor Trade House, funnelling the money to Amstor Trade LLC as a loan. Later on, the Vahorovskyis brothers acted to make a deal to sell the trademarks to the companies that were controlled by them. The equipment of Amstor supermarkets was 'sold' and 're-registered' to these companies. Similar schemes were used when withdrawing vehicles and special machinery that belonged to the retail chain. In November 2014, Smart-Holding noticed photos of receipts from Amstor outlets located in the
Anti-Terrorist Operation Zone Anti-Terrorist Operation Zone (), or ATO zone (), was a term used by the media, public, the government of Ukraine, and the OSCE and other foreign institutions to identify Ukrainian territory of the Donetsk and Luhansk regions (oblasts) under the c ...
, from which the "Amstor Trade House" name disappeared, and the VAT equaled 0%. Smart-Holding did not give its consent though. It was revealed that money from Amstor's accounts was transferred to some fake companies. From the publication of receipts in social media from the supermarkets in December 2014, Volodymyr Vahorovskyi was discovered to have used the money to buy an apartment in Hrushevsky Street in
Kyiv Kyiv, also Kiev, is the capital and most populous List of cities in Ukraine, city of Ukraine. Located in the north-central part of the country, it straddles both sides of the Dnieper, Dnieper River. As of 1 January 2022, its population was 2, ...
, an expensive car, etc. The proceeds from these 18 outlets were not debited and were appropriated by the ex-managers.


Aftermath

Smart-Holding removed the Vahorovskyis from the management and assigned new managers to all the branches of the Amstor chain. Armed people acting under the command of the Vahorovskyis blocked access to the stores. All that led to the suspension in the supermarkets' operations—neither representatives of Smart-Holding nor the employees were allowed in. The representatives of Smart-Holding received access to the stores only on 9 January 2015. In 10 days, servers were removed, labour books of employees disappeared, and the IT infrastructure of Amstor, contacts of suppliers, and accounting papers were destroyed. Amstor LLC was declared bankrupt by the decision of the Commercial Court of
Dnipropetrovsk Oblast Dnipropetrovsk Oblast (), is an administrative divisions of Ukraine, oblast (province) in simultaneously southern, eastern and central Ukraine, the most important industrial region of the country. It was created on February 27, 1932. Dnipropetro ...
on 23 July 2019. In December 2020, Madera Development, whose beneficiary is Ihor Mazepa, acquired several shopping centers, land, and commercial equipment from Amstor at an auction in the
Prozorro Prozorro ( Ukrainian: Прозоро – transparent, clear) is a public electronic procurement system where state and municipal customers announce tenders to purchase goods, works and services, and business representatives compete for the opp ...
system.


Outlets in the ATO zone

Eighteen stores of the Amstor Retail Group are situated in the ATO zone. These stores were initially operated under the supervision of Vahorovskyi, who had negotiated with the leaders of the temporarily occupied territory of Donetsk. Subsequently, Vahorovskyi lost control of the Amstor stores in the territory of the
Donetsk People’s Republic The Donetsk People's Republic (DPR; , ) is occupied territory in Ukraine that the Russian Federation has claimed to annex and declared as a republic of Russia, comprising parts of eastern Ukraine's Donetsk Oblast, with its capital in Done ...
due to actions by local militants.


References


External links


Official site
{{Webarchive, url=https://web.archive.org/web/20141216192914/http://amstor.com/ , date=December 16, 2014 Retailing in Ukraine Companies of Ukraine