“War has always been a racket, and it is possibly the oldest, easily the most profitable, and, surely, the most vicious,” said Smedley Butler, once the most decorated US Marine in history before becoming an author and anti-war advocate. Before dying in 1940, Butler said that during his 33-year military career, he was primarily “a high-class muscle man for Big Business, Wall Street, and the bankers.”
The war in Ukraine seems to be taking a similar path. War profiteers have already made billions of dollars from death and misery in the country. A Reuters report reveals oil companies made nearly $220 billion in profits in 2022, “a windfall of Russia`s invasion of Ukraine,” as President Joe Biden recently critiqued.
When the war ends, rebuilding Ukraine will represent a trillion-dollar opportunity for US and European construction companies, who are already planning how to get their hands on those profits.
Opportunist Hedge funds have also emerged as significant war profiteers. According to the Guardian, they raked in nearly $2 billion in Q1 2022 alone, but worse yet, their corporate greed has hampered the Black Sea Grain Corridor talks, putting profit before global food security.
The Black Sea grain deal represents a lifeline for “79 counties and 349 million people on the front line of food insecurity,” the International Rescue Committee said.
Shortly after the start of the war, Ukrainian companies began facing demands from Western creditors for loan repayments and subsequent hostile takeover attempts. Unlike Western governments that have provided unequivocal support to the Ukrainian government, these American creditors have shown limited flexibility in the wake of the war that made businesses unable to operate.
Argentem Creek Partners (ACP), an American distressed asset fund, was legally prevented from taking over GNT Group’s Odessa Commercial Sea Port grain terminal. GNT’s shareholders sought and succeeded in getting a Nicosia District Court order against ACP because of its aggressive takeover actions.
ACP and another US Hedge fund, Innovatus, have waged a legal, media, and political battle against GNT in a bid to take over the company after it failed to repay its debt to the Hedge fund immediately after ACP abruptly issued a demand.
ACP began pursuing GNT legally in the United Kingdom, Cyprus, and elsewhere and is now seeking to take control of the grain terminal, accusing the Ukrainian owners of the terminal of corporate mismanagement and fraud.
“Despite Innovatus’ and ACP’s continued support for GNT Group, including the offer to postpone loan payments following Russia’s invasion, investigations revealed that the company liquidated all grain pledged to Innovatus without notice or consent,” the Hedge fund group stated at the time.
Ukrainian companies have described ACP’s efforts as war profiteering, while ACP and other Western creditors insist they merely continue their business and accuse those companies of corruption.
On the legal side of this takeover attempt, the London Court of International Arbitration (LCIA) is the main dispute venue. The LCIA is hearing a case about GNT Group, the critical Ukrainian operator at the Odessa Port Terminal, which has been consistently bombed by Russia.
GNT is a key player in the widely covered Black Sea Grain Corridor, and while the US plaintiff, ACP, has been successful in getting massive coverage of its dubious allegations, no Western journalist has covered the position of the Ukrainian parties.
As exclusively revealed to this news organization, two prominent Ukrainian companies, Brooklyn-Kyiv and Kadorr, have tabled offers to buy out the loan. Curiously, despite constantly and repeatedly looking for a response, the US Hedge funds do not reply.
Gubankov of Brooklyn-Kyiv, which has more than the $70m in reserves needed to buy out ACP’s claim to the GNT Group to ensure it remains in Ukrainian interests, has a theory: “It seems to me that they don’t want to sell, as this terminal can make them more money in the long term,” he says on a phone call. “It is a very complicated and complex situation.”
Kadorr Group has also revealed documents exclusively to this news organization intending to offer the US Hedge funds 85 percent of GNT’s current market value.
Representatives of ACP and Innovatus were approached for comment but did not respond.
Ana Firmato, Managing Director at Innovatus, has previously stated: “ACP and Innovatus remain committed to their mission of promoting private investment activism as a means to combat corruption in Ukraine and will continue to invest in projects that align with these objectives.”
The war in Ukraine has not only brought devastation and humanitarian crisis but has also uncovered the darker side of profiteering and hostile takeover tactics amidst the chaos. As the conflict rages on, it is essential to shine a light on such practices and work towards ensuring the stability and integrity of Ukraine’s economy and its people.
Market Capital Research 