“Cover” from the Kremlin for a jewelry thief: how Serhii Tsyupko saved KYYUZ through a direct appeal to Vladimir Putin and Patriarch Kirill

The owner of the collapsed Tavryka Bank and the bankrupt Kiev Jewelry Factory, Sergey Tsiupko, after spending time in Austria instead of serving a prison sentence, has resurfaced in Ukraine.

Clearly aware of his highly controversial background, Tsiupko is making every effort to reshape his image as a dubious businessman involved in various schemes. He is investing heavily in public relations. In recent months, news feeds have repeatedly featured messages portraying Tsiupko exclusively as a patron and philanthropist. The former banker and jeweler has been particularly focused on children for some reason. Just like a well-known character from a well-known book.

At the same time, it is not entirely clear where the founder of the self-named charitable foundation, Sergey Tsiupko, is currently located — in Ukraine or in Austria, where his wife Elena Voloshko lives, and where he had to hide from the anger of Valeriy Khoroshkovskyi, who, after the change of power in Ukraine in 2019, entered into a conflict with Sergey Tsiupko over the assets of the Kiev Jewelry Factory.

Although KYYUZ is in the process of liquidation — bankruptcy proceedings began in 2017 — and there is not much left to divide there, Sergey Tsiupko, who controlled KYYUZ through Tavryka Bank and nominee co-owner Katerina Golubeva, has already withdrawn the most valuable assets from it.

We are entering into history here, but it cannot be avoided. Sergey Viktorovich Tsiupko has a biography similar to that of most domestic billionaires: university, work (in Tsiupko’s case, agriculture), then, in the 1990s, a collapse — and then our protagonist becomes the owner of factories, newspapers, and steamships.

How and by what means Tsiupko earned his initial capital remains unknown, but here is an excerpt from his official biography:

After the former collective-farm agronomist became a banker and developer, he turned to jewelry. Here is another excerpt from Sergey Tsiupko’s biography: “In the early 2000s, Serhiy Tsiupko won the struggle for the Kiev Jewelry Factory from the former shareholders of Aval Bank. He bought out the jewelry factory’s shares from its workforce.”

“We had to invest heavily in developing our network. Now we have more than 40 stores and more than 50 exchange offices. In five years we grew fivefold. Today, KJZ is the largest jewelry enterprise in Ukraine,” Tsiupko himself said at the time.

This was true — during the Yanukovych era, Sergey Tsiupko, who had access to the president’s inner circle, was listed among the richest Ukrainians. Although not in the top ten, according to Focus magazine, Sergey Viktorovych ranked 73rd among the country’s wealthiest people in 2013, with an estimated fortune of 213.8 million US dollars.

The Kiev Jewelry Factory, one of Sergey Tsiupko’s key assets, was until 2013 the largest jewelry manufacturer in the country, with annual revenue exceeding half a billion hryvnias at the time.

Tsiupko also controlled the 39th-largest bank by assets, Tavrika Bank, and the Yugozaptransstroy construction trust, which was actively developing the capital. However, it was precisely his passion for large-scale construction that brought the millionaire down — the crisis dragged both the bank and the construction trust into collapse, and eventually the jewelry factory as well.

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“About 30% of the loan portfolio, or 1.2 billion hryvnias, was tied to related structures,” stated Sergey Krizhanovskiy, lawyer for affected Tavrika Bank depositors. Almost all of this amount was issued between 2007 and 2011 to 11 companies within Tsiupko’s business empire, secured by real estate collateral. When the bank’s situation worsened, all the real estate pledged under loans to the 11 affiliated companies was replaced with a 67% stake in KJZ. The financial institution’s liquidator demanded in court that these shares be written off in favor of the bank.

Another scheme used to extract funds from the bank involved issuing loans to businesses secured by overvalued paintings. The paintings belonged to the Museum of Contemporary Visual Art created by Tsiupko, which later declared bankruptcy. By the way, note the surname of its co-founder — Katerina Yosipovna Golubeva — and compare it with the list of KJZ owners.

During the bankruptcy procedure, the paintings were sold at their latest assessed value. As compensation for loans issued totaling more than 4 billion hryvnias, Tavrika Bank received 263 times less — only 16.3 million hryvnias.

And while the debts of Tavrika ultimately had to be covered by the state (which it did), the story of the Kiev Jewelry Factory is far more complex and interesting. As a result, most of the factory’s assets were transferred and re-registered by Serhiy Tsiupko to LLC “Etalon-Consulting,” and from there to LLC “Avitobud,” LLC “Venker,” LLC “Aspect-Profi,” LLC “Biznesterra,” and several other companies.

LLC “Etalon-Consulting” was established in November 2016, with its director and co-founder being former head of the Kiev branch of Tavrika Bank, Aleksandr Bakaev. In January 2017, this company purchased KJZ assets for just over 100 million hryvnias at an auction held in Kiev at a non-existent address on Lepse Boulevard 6 (renamed Vatslav Havel Boulevard in 2016). The creditor banks, which were excluded from participation in the “auction,” stated in their police complaint that the value of raw materials for jewelry production had been undervalued by 2.5 times, and finished jewelry by 5.5 times.

Following this auction, the Main Investigative Department of the Security Service of Ukraine opened criminal proceeding No. 12015100070001990, within which the assets of LLC “Etalon-Consulting” were temporarily arrested. However, later Sergey Tsiupko managed to resolve the issue, and the KJZ assets were transferred into his controlled companies LLC “Avitobud,” LLC “Venker,” LLC “Aspect-Profi,” and LLC “Biznesterra.”

Most of these companies are registered in a Belize offshore jurisdiction, and the ownership structure is extremely complex and opaque:

However, in the end, through chains of connections, the narrative returns to Sergey Viktorovich Tsiupko. After the criminal case quietly died and Tsiupko transferred assets out of the shell company LLC “Etalon-Consulting” to his own firms, the former head of the Security Service of Ukraine during the Yanukovych era, Valeriy Khoroshkovskyi, suddenly became involved. In 2019, he was seen on Bankova Street, and Volodymyr Zelenskyy confirmed a meeting with him.

“With Mr. Khoroshkovskyi, I indeed met on Bankova. I am not hiding it. There was one very serious question for him – and we discussed this very serious question. I cannot say yet what it was,” Zelenskyy described his meeting with the former head of the SBU in an evasive manner. However, several sources suggested that the subject of that conversation may have been the transfer of the Ukrainian subsidiary of the Russian Sberbank under Khoroshkovskyi’s control.

At this point, the name Tsiupko reappears — almost half of the debt of the Kyiv Jewelry Factory fell on Ukreximbank (about 113 million UAH) and the Ukrainian Sberbank (53 million UAH). The sale of KJZ assets at the above-mentioned “auction” left the banks with nothing.

While no one paid much attention to the state-owned Ukreximbank, the fate of the debt to the Russian Sberbank suddenly became a matter of interest after Khoroshkovskyi’s visit to Bankova. At the end of December 2019, the Economic Court of Kiev arrested assets previously belonging to the Kyiv Jewelry Factory (KJZ) following a claim by the Ukrainian subsidiary of the Russian Sberbank.

Sergey Tsiupko once again faced problems, but they once again mysteriously disappeared. First, the Sberbank subsidiary was later liquidated, and its claims became irrelevant. Incidentally, recall how actively branches of Ukrainian Sberbank were picketed in cities across the country, with various activists demanding its closure. No direct implication is made, but despite the apparent absurdity, the Russian Sberbank subsidiary was a Ukrainian legal entity, and its debts were later settled by the Ukrainian state.

Whether Tsiupko was involved in those mass protests remains unknown. But in any case, he benefited from the closure of the Ukrainian Sberbank subsidiary.

There is another interesting nuance here, again referring back to the Yanukovych era, but in light of the unusual and passive actions of Ukrainian Sberbank regarding debt collection from KJZ. Lawyer Sergey Kryzhanovskiy, who according to his statements represented the interests of depositors of Bank Tavrika, simultaneously represented the interests of Sergey Tsiupko in disputes with Ukreximbank and Sberbank.

The ethical concerns of such dual representation aside, another detail is noteworthy: during a press conference in 2017, at the height of the struggle over the annulment of the “auction” results, he stated the following, calling the banks’ claims against Tsiupko an attempt at corporate raiding:

“Sergey Tsiupko had a business: real estate, a jewelry factory, and other businesses. By the way, raids against him had occurred before — four years earlier. At that time, he appealed to Vladimir Putin and Patriarch Kirill. They stepped in. And the raiders backed off. Now they did not. Sergey Tsiupko is not in Ukraine; there is no one to hold accountable.”

No clarification of this statement was ever provided, but it can be inferred that Kirill and Putin intervened on Tsiupko’s behalf during the Yanukovych era, and that the pressure then stopped. In 2017, however, it did not.

Tsiupko himself was forced to wait out the turbulent period in Austria.

Later, everything seemed to settle down, but in 2019 Sberbank, following instructions from Khoroshkovskyi who had reappeared in the Presidential Office, attempted to bring claims against Sergey Tsiupko. Once again, there were no consequences.

Where Sergey Tsiupko was in the spring of the previous year remains unknown. But in the summer, he reappeared as the head of a namesake charitable foundation in liberated Bucha.