Ukrainian tycoons undervalued in Forbes ranking
From Kyiv Post
By John Marone, Kyiv Post News Editor
A ranking of the world's richest individuals published by Forbes magazine has apparently undervalued the assets of Ukraine's wealthiest tycoon, Rinat Akhmetov, by about threefold.
The US-based business magazine Forbes has included seven Ukrainian billionaires in its annual list of the "World's Richest People" for 2007 - four more than last year - but at least one of them, the country's wealthiest person, has had his fortune seriously underestimated.
Last week, Forbes rated 40-year-old Donetsk tycoon Rinat Akhmetov, a member of Ukraine's parliament, 214th in its list of 946 billionaires, estimating his net value at around $4 billion.
For comparison, Microsoft founder Bill Gates topped the Forbes list with $56 billion, and Russia's Roman Abramovich came in 16th place with $18.7 billion.
To the seven Ukrainian billionaires listed by the US-based magazine, there were 19 Russians.
However, Kyiv-based analysts say the influential industrialist from Donetsk, who boasts significant interests in metals, mining, energy, telecommunications, food processing and even his own top-ranked football team, is worth as much as three times more than Forbes gave him credit for.
"All our numbers are based on a snapshot of balance sheets taken on Feb. 9, the day we locked in stock prices and exchange rates," reported Forbes, which boasts an international readership of 4.6 million.
Big Four international auditing firm PricewaterhouseCoopers estimated the consolidated assets of Akhmetov's holding company, System Capital Management, at $7.2 billion at the end of 2005.
Andriy Bespyatov, head of research at Kyiv-based investment bank Dragon Capital, puts the figure now at almost $12 billion, based on the current market value of Akhmetov's assets, not all of which are traded publicly.
"We don't know what kind of methodology Forbes used, but the figures were greatly deflated," Bespyatov told the Post.
For its part, PricewaterhouseCoopers might have used the book value of SCM to get its figure of $7.2 million, he said. PricewaterhouseCoopers' Kyiv office declined the Post's requests for commentary, citing client confidentiality.
Following Akhmetov in Forbes' "Richest People" list was Viktor Pinchuk, who placed 323rd with assets of $2.8 billion. Pinchuk, the son-in-law of former President Leonid Kuchma, controls Dnipropetrovsk-based Interpipe, one of Ukraine's largest business holdings, in addition to significant assets in media, machine building and agriculture.
Bespyatov said Forbes' estimation of Pinchuk's wealth was more or less correct, as were those of Ukraine's third and fourth richest individuals: CEO of the Industrial Union of Donbass, Serhiy Taruta, and National Security and Defense Council Secretary Vitaliy Hayduk, also co-founder of the industrial holding.
Forbes said both are tied for 488th place with an estimated $2 billion in assets. Pinchuk's spokesperson, Nikita Poturaev, declined to confirm or deny Forbes' estimate of his boss' monetary value, adding only that "we were very honored to have been included in the rating of such a prestigious publication."
The fifth and sixth richest Ukrainians, according to Forbes, were the co-owner of the so-called Privat business group (in Dnipropetrovsk) Igor Kolomoysky, at position 799th with $1.2 billion in estimated assets, and a major shareholder in leading Ukrainian bank Privatbank, Hennadiy Bogolubov, thought to be worth the same. Like their wealthier co-patriots, both control
a diversified business holding with assets in various sectors.
Dragon's Bespyatov said the evaluations of Kolomoysky and industrialist Kostyantin Zhevago, who placed last among Ukraine's rich and 891st overall with $1 billion in assets, were also distorted, but not as much as with Akhmetov.
The Privat empire includes lucrative holdings in oil, chemicals, machine building, metallurgy and finance, while Zhevago, at only 33 years of age, is known for his mining, automobile, pharmaceuticals and banking interests.
In Forbes' 2006 "World's Richest People," Akhmetov's worth was estimated at $1.7 billion, or $700,000 less and 191 places lower than in the previous year.
In the U.S. magazine's 2006 list, Zhevago, Bogolubov, Kolomoysky and Hayduk didn't appear at all.
