19 December 2023

Shopping-center colossus Epitsentr K, a major corporate donor to the Ukrainian armed forces owned by a billionaire couple who are ranked among the country's richest people, maintained connections to its business in the Russian-occupied part of Donetsk region after the full-scale invasion in 2022, an RFE/RL investigation has revealed.

The finding by Schemes...suggests that, in the midst of the Russian onslaught, members of Ukraine's business elite can find ways to protect their investments in areas of the country now under Russian control - sometimes in violation of the law.

For Epitsentr K, that opportunity came via its former Donetsk regional manager, who has since sided with Russia in its war against Ukraine. Epitsentr K's payments to this ex-manager, first reported by Schemes on October 17, mark the second time the company, which promotes itself as Ukraine's largest shopping-center chain, has been linked to a business in Russian-occupied Ukrainian territory.

Earlier investigations by Schemes and RFE/RL's Crimea.Realities showed that Epitsentr K's owners, Oleksandr and Halyna Hereha, also own a chain of Epitsentr-style hypermarkets on the Russian-controlled Crimean Peninsula...

The company has pledged to provide $1 million for demining vehicles, a priority for Kyiv as its armed forces struggle to regain control of heavily mined, Russian-occupied areas of eastern and southern Ukraine...

Promotional text on the company's website assures government-financed institutions that Epitsentr K will deliver its goods to any part of Ukraine "except the occupied territories."

But Ukrainian tax documents obtained by Schemes indicate that, contrary to these statements, business in the Russian-occupied portion the Donetsk region has made up part of Epitsentr K's portfolio...

In January 2015, nine months after the war between Ukraine and Russian-backed separatist forces erupted in the Donbas, Epitsentr K announced it was closing its five retail outlets in areas of the Donetsk and Luhansk regions outside of government control...Roughly five months after Epitsentr officially closed its Donetsk outlets, a retailer called Galaktika (Galaxy) was registered at the same address as Epitsenter K's shuttered shopping center in the Donetsk region city of Makiyivka...

The two firms also share largely the same training manual...One senior manager features in both manuals: Hennadiy Halchuk, a former Epitsentr K acting director...As Galaktika's general director, Halchuk, who stayed in the Donetsk region after the war fomented by Moscow broke out in 2014, ensured that the store secured the support of Russian-backed officials, even while receiving a monthly salary from Epitsentr K...Among other measures, Galaktika, under Halchuk's management, donated a vehicle to the Russian-backed emergency response agency in 2020 and hosted firefighting training in 2018...It also has expanded, opening a store in October 2022 with household and DIY construction supplies in Mariupol, a Donetsk region city that was largely destroyed and seized by Russia earlier that year after a long and deadly siege...

According to information from Ukraine's State Tax Service that two independent sources provided to Schemes, Epitsentr K paid Halchuk a full-time monthly salary from September 2013...until July 2022...

Halchuk did not respond to Schemes's questions about his relationship with Epitsentr K...Hereha, who has been under Russian sanctions since 2018, did not respond.

Schemes editors also addressed their questions to Epitsentr K's headquarters. As of the time of publication of this article, the company had not replied.

Ukrainian prosecutors have made no further inquiries...