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Ukrainian gas oligarch Firtash arrested in Vienna on FBI warrant

Source: Reuters - Thu, 13 Mar 2014 17:44 GMT
Author: Reuters
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* Detained in Austria at request of U.S. authorities

* Firtash is one of Ukraine's most influential oligarchs

* Company says case appears related to 2006 investment project

* Group DF says sure incident "misunderstanding, will be resolved soon"

By Michael Shields and Angelika Gruber

VIENNA, March 13 (Reuters) - Industrialist Dmytro Firtash, one of Ukraine's most influential oligarchs with close links to Russia through his gas interests, has been arrested in Austria at the request of the United States.

Austria's Federal Crime Agency said on Thursday that Firtash was held on Wednesday on suspicion of violating laws on bribery and forming a criminal organisation in the course of foreign business deals.

Ukraine's Foreign Ministry said: "Our embassy in Austria has confirmed that Dmytro Firtash has been detained at the request of the (U.S.) Federal Bureau of Investigation. He is now being held in a detention centre."

The detention of Firtash, 48, whose business concerns in gas trading and chemicals thrived under ousted President Viktor Yanukovich, is the highest profile arrest in the wake of political turmoil which installed new pro-Western authorities in power in Kiev in February.

Firtash's company Group DF said the FBI case appeared related to an investment project in 2006 which another group source said was in India.

The statement from Group DF said: "We know that the actions of the law enforcement organs of Austria in relation to Dmytro Firtash are not linked with the situation in Ukraine, not with the activity of the Group in Europe and America but relate to an investment project in 2006.

"We are sure that the present incident is a misunderstanding and will be resolved very soon."

A spokesman for Austria's Federal Crime Agency said the order to take him into custody came this month.

Forbes Ukraine magazine last year put Firtash in 14th place on its Ukrainian rich list, setting his fortune at $673 million.

Though he is nowhere near as wealthy as the country's top oligarchs, Firtash's close links to Russia, and possibly to the Kremlin via the energy sector, make him one of the most influential figures in Ukraine.

Firtash is not named on an initial European Union list of Ukrainians suspected of misusing state funds and violating human rights and whose assets are to be frozen as a result of the crisis over the Russian incursion into Ukraine's Crimea.

He is one of several Ukrainian oligarchs who have called for Ukraine's territorial integrity to be maintained in the face of Russia's military incursion into Crimea.

U.S. prosecutors have not announced any charges against Firtash, and a database of criminal cases did not show any on Thursday. The United States has had an extradition treaty with Austria since 2000, according to the U.S. State Department.

'STRONG MESSAGE'

Ukraine's new prosecutor-general Oleh Makhnitsky told Reuters: "We are not the initiators of this action".

The Austrian Federal Crime Agency said in its statement: "Based on years of investigations by the U.S. FBI and an arrest warrant issued by a U.S. federal district court, Vienna prosecutors issued a national order to detain the businessman."

He was taken into custody without incident in Vienna on Wednesday evening, it said, and was transferred to a justice facility in Vienna.

However, some analysts saw a link between Firtash's detention and U.S. and Western governments' moves to bring pressure to bear on Moscow over Crimea.

"It (Firtash's arrest) sends a strong message to Russia that the west is willing to go down the financial sanctions route unless it backtracks over Crimea and over broader policy towards Ukraine," said Timothy Ash of Standard Bank.

Firtash is founder and chairman of Group DF, whose website describes it as a diversified international group of companies operating across Europe and Asia in fields including fertiliser, titanium, gas distribution and banking. His plants and companies are present in Ukraine, Germany, Italy, Cyprus, Tajikistan, Switzerland, Hungary, Austria and Estonia.

But a substantial part of Firtash's fortune came from a 45 percent stake he held in RosUkrEnergo, a subsidiary of Russia's Gazprom which acted as an intermediary between the Russian supplier and Ukraine's state-run Naftogaz until former prime minister Yulia Tymoshenko shut RosUkrEnergo out of the market in 2009.

He kept close links with Russia when Yanukovich came to power in 2010. His Ostchem Holding, grouping chemical firms in east and central Europe, has enjoyed gas discounts from Gazprom which promised him 8 billion cubic metres annually at a price last year of $260 per thousand cubic metres, according to the Ukrainian media, less than the $400 per thousand cubic metres paid by Naftogaz.

Before Yanukovich's dramatic and swift fall from power, Firtash's contacts made him even more powerful than Ukraine's richest man, steel and chemicals billionaire Rinat Akhmetov.

A year ago, in what was seen then as a move that would help Yanukovich secure re-elelection in 2015, Firtash bought a leading TV station Inter for a reported $2.5 billion.

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