Interview of AMIC leadership with Serhiy Kuyun, head of "A-95 Consulting Group"

The Economic Security Bureau of Ukraine (ESBU) announced the seizure of assets and corporate rights of AMIC Ukraine, one of the leading players in the fuel market. In addition to accusations of tax evasion, the bureau openly talks about the company's connection with Russian business. Such discussions continue since Lukoil sold these assets to the Austrian investment company AMIC Energy.

The visit to Kyiv of AMIC Energy's managing director, Günter Maier, demonstrates the seriousness of the situation. For the first time since 2014, he attended a press conference, reiterating the absurdity of ESBU's accusations of ties to Russia and tax evasion.

As for the toxic ties, AMIC’s side is supported by the company’s normal functioning on the basis of former Lukoil assets in Latvia, Lithuania, and Poland, which are now close allies of Ukraine in the war against Russia and whose anti-Russian stance is undeniable. We may also add strict European compliance, which has been additionally strengthened due to numerous anti-Russian sanctions.

Perhaps the Ukrainian ESB knows more? So far, the case file comprises only screenshots of an article from 2017 on one of the numerous “yellow journalism" websites, according to AMIC attorneys.

I believe that the “ghost of Lukoil" will always loom over the AMIC company. Only a professional investigation can answer all questions, but the ESBU's tactics and arguments do not provide such hope. In fact, this is an Austrian company's business, and Ukrainian investigators must consider this if Ukraine claims a European perspective.

The tax claims can receive a more reliable evaluation because every Ukrainian businessman had the experience of being suspected of forming a "criminal organization with the intent of causing damage to the state budget of Ukraine." Suffice it to say that suspicions of tax evasion were leveled against AMIC in the absence of a tax audit.

I met Günter Maier and Audrius Stropus, General Director of AMIC Ukraine, in the Kyiv office of the company right after their press conference. Under the wail of air-raid sirens, I asked them questions, but it is up to everyone to decide how sincere their responses were.

Serhii Kuyun: Good afternoon, dear gentlemen. Welcome to Ukraine. We have a war here now, and you are coming from Europe. So, foremost, I want to ask how you feel here, how long did it take you to decide to come here?

Günter Maier: I like being in Kyiv now because it is very important for us to be with our employees.

In Ukraine, we have about two thousand employees, and their families are also here. Since the start of the war, we helped our workers as much as we could. And they also helped us in their best way. Therefore, we are very proud of the position of our employees, and the extra efforts they make, despite this unprovoked Russian invasion of Ukraine and this brutal war.

As for the feeling of staying in Kyiv, so far they are the same as before. Although I understand very well that you do not feel fear until something scary actually happens, right? I am also happy that Ukraine is showing positive progress in this war, and we all hope that the war will soon end with the victory of the Ukrainian people.

Serhii Kuyun: Where have you already been, and have you seen the company's facilities? As far as I know, the company suffered significant losses due to attacks near Kyiv and in general.

Günter Maier: Yes, we visited our oil terminal in Borodyanka, which was partially destroyed by an airstrike. We went there to look at the damage. We are already working on restoration — assessing the damage to know how much it will cost to rebuild it and what exactly needs to be done. As for the damage, I can say that the damage to our stations and the terminal is estimated at about 20 million dollars.

The twin stations in Kherson near the bridge were among the first to be damaged (the Antoniv bridge - author's remark).

In addition, if I am not mistaken, we have about 15 damaged stations. Some of them are located on the territory temporarily occupied by the invader. When the area is liberated, we will also go there to assess the damage and repair the stations to an acceptable modern level.

Serhii Kuyun: We know that your company AMIC Energy is Austrian and that Austria has always been a safe haven for the Russian capital, that is, there has always been a very strong Russian lobby in Austria. Please tell me, how do people in Austria perceive the war today, and what is your personal perception?

Günter Maier: Actually, I can't say anything about the safe harbor for Russians or the Russian capital, because I don't know anything about it. I can only say that Austria is definitely a safe haven for everyone. We now have a really large number of Ukrainians who have arrived and live here safely and under protection.

The attitude of the Austrian people and my own one to the war is unambiguous: an invasion of another country simply cannot take place in the 21st century. I believe that it is very important for all of us that the borders are inviolable. The Austrian people are concerned about the events in Ukraine. It upsets them a lot. Someone still remembers the times when Austria took part in wars. Often as the responsible party, starting wars. And I don't think the Austrians would like to go through that again. I also fully understand that Ukrainians also do not want to go through this again. That is why I hope that the situation will improve soon.

I am sure that Europe is strongly united with Ukraine, I see that the EU provides significant support, and I believe that Europe perceives Ukraine as a country that should constantly develop further.

Serhiy Kuyun: Audrius, I have a question for you. Since we have heard Austria's position, we would like to hear yours. I know that you often visit Lithuania and Poland. What is your attitude to what is happening, how do you see it, and what the company is doing to somehow help our country?

Audrius Stropus: Well, as a Lithuanian and like all Lithuanians, we are 100% on the Ukrainian side, and this is not even discussed. We remember the year 1988 when we also fought for independence and understood that war in our country could also break down, but fortunately, everything was peaceful.

We were very surprised as a company by how patriotic the people are. Understanding all the possible threats posed by the events taking place in Ukraine, they continued to work for our company all this time. And we, in turn, supported them financially for 3-4 months. Even when the company’s certain gas stations did not work, we paid everyone salaries. Furthermore, everyone who went to the front and joined the Armed Forces (we have 71 mobilized workers) was paid and continues to be paid.

Serhii Kuyun: Good, I want to discuss the history of AMIC's acquisition of Lukoil assets, because it's arguably the most important issue right now — the company's affiliation, shadow, and links with Lukoil and Russian capital. And I wanted to clarify for myself what people are truly interested in. AMIC Energy is a young company that buys a large business from a Russian oil corporation for hundreds of millions of dollars.

As a result, the question arises, what were the funding sources for this, and what was the calculation? Because we know that Europeans are wary of taking risks, and the company is buying a large asset in a country where a war has already begun. That is, what drove you, what was the plan? Because in fact, it is quite difficult to imagine such a development of events.

Günter Maier: I think I will start answering your question about the history of AMIC. Somewhere at the end of 2012, we sat and thought about the fact that we, as its founders, want to do something together. And already in 2013, the company AMIC was founded, and in fact, it began its activity as an investment company that would like to carry out buyouts using loan funds in special situations.

This meant finding targets that could be acquired fairly cheaply because they were in difficult situations. Then you can actually use your experience, if you have it in this business, to restructure the company. We had a lot of experience in this, the AMIC team consists of experts in the energy, financial and legal sectors. So that's point number one. After the launch of AMIC, we began evaluating opportunities in 2012-2013 and focused on energy and the energy infrastructure sector.

I started this activity with Wolfgang Rutnestorfer, the former CEO of OMV, back in 2011. And we basically looked at different targets. When AMIC was created, we were looking at power plants in Romania, Bulgaria, and other projects in Poland and wanted to find something that we could understand and where we could actually invest in a way that would have a big impact.

Due to unfortunate circumstances — and as you know, in 2014, Russia first attacked Ukraine, i.e. your country, annexing Crimea and the eastern regions — and because of this, such an opportunity came around. It also appeared because we were in contact with various energy companies. And Lukoil was the company whose management we already knew for some time. It usually happens in business that you know the management of large energy companies from all over the world. We first heard about the fact that Lukoil wants to sell its Ukrainian network in the spring of 2014.

It is important to say that not only did they sell assets in Ukraine, but they also sold assets in Bulgaria - MOL Group bought some of these assets, and they also sold assets in Slovakia and the Czech Republic. And the assets in Estonia, which were bought by Olerex, or Aqua Marina itself. And so there was an opportunity to purchase AMIC Ukraine.

Personally, I was very skeptical of this idea because we were faced with a situation where the company we could acquire was almost dead. The company itself, which was Russian, faced serious problems in Ukraine in 2014 due to reputational damage. It was a so-called white box because, as we know, they no longer had any brand, and sales were falling. As a result, they ran out of liquidity without fuel.

After looking at all of this, we said that it could only work if we could find a transaction structure that would limit our risks.

The founders of AMIC indeed are wealthy people, we accumulated capital for decades, working hard in various businesses. So we can say that the assets of the founders at that time were estimated at approximately 5 to 20 million dollars each separately.

And we decided, okay, we have some acquisition opportunities. But at the same time, there should be a transaction structure that is a good blend of risk and income. That's why in the end we suggested to the seller that we could only do it by paying a small initial price first and then adding to that an earn-out structure of future earnings over a period of time.

The earn-out structure is simply a deferred payment of the purchase price based on the performance of the company that is then developed. And I can't disclose the deal price because we are bound by the confidentiality of the sales agreement.

The development of the company for eight years did not go steadily upward, at the beginning we had big problems. It was necessary to restore the supply of fuel, and to re-launch capital into the flow of working capital. And there was also a sharp and urgent need to develop the brand of the company. So we hurriedly, staying right in Ukraine, thought out the design and started managing the company.

We firstly successfully restructured the costs. Then we also reduced the number of staff and stabilized the business and operations based on our own experience. But the company developed in leaps and bounds, from decline to growth - and vice versa, there were better months, there were worse. In 2017-2019, development was better. In 2020, when COVID started, the situation worsened, then it got better again. And this year, a brutal war began and made its adjustments.

Serhii Kuyun: Look, before any deal there is an assessment of prospects, some kind of business plan. 8 years have passed since this deal, what are the results of this investment? If possible, by the platforms where you are represented today. Has this investment paid off? Is it possible to say today that some platforms did not work, and some did?

Günter Maier: First, we definitely do not regret buying AMIC Ukraine, even though the business plan was not ideal, because the company's affairs went up and down.

I believe you can make a lot of business plans until reality destroys them, right? Therefore, you can make a business plan every year. We also had planned every year, sometimes we did a little better, sometimes worse. Often it is not your personal responsibility when things suddenly take a turn for the worse. That is, it can be force majeure circumstances: first COVID, then war...

But there have always been other problems when the situation in the market changed, when you, for example, face the gray market or the players who can dump. But I don't have to tell you this, Serhii, because you, as an expert in the oil market of Ukraine, know it better than I do.

Serhii Kuyun: Can we say that some business is more successful? How did the Polish platform work, how about the Baltic countries’ one? Maybe regarding Ukraine, or just how do you assess this result overall?

Günter Maier: I think it is quite clear that things are going better in Poland. In my opinion, from the point of view of business, these countries can be compared in individual years. But we should not forget that in Ukraine we have twice as many gas stations as in Poland. And it is good that we have a great potential to bring Ukraine to the level of Poland, which we are constantly trying to do, providing additional offers, as well as simply benefiting from the economic development of the country.

And I think I remember that it was in 2018 and 2019 when we saw that the Ukrainian economy was developing very rapidly, right? This was also evident from our sales, although it cannot be compared with countries like Poland or others. But the problem is that when you start at a very low level, it's easy to grow rapidly at first, and then when you get closer to normal business situations in countries, it becomes a bit more difficult.

Serhii Kuyun: If we talk about suspects of involvement in Russian business, taking into account the fact that you also have platforms in the Baltic States, Poland, do you have such problems there? Or maybe you had them? I heard that the company has been dealing with them for a while. How did events develop there, do you have any questions/complaints regarding the connection with Russian business today?

Günter Maier: If we are talking about Poland, Latvia, or Lithuania, then we did not face such problems there. But first I will tell you what we have in Ukraine, and then we will return to other countries.

There have been genuinely no problems with the authorities in Ukraine in the last eight years since we have been working here. It was even quite the opposite. Take, for example, the payment of taxes, as you have probably already heard, we are among the top five taxpayers in Ukraine. In fact, I would say that last year the Ukrainian authorities highly praised our work, primarily for the implementation of European service standards, as well as for our support for the security of fuel supply, especially after the start of the war in February. So there were no problems from the operational side.

What happens in Ukraine is that from time to time fabricated fake articles appear, which are then published on dubious websites. And there are ridiculous examples of accusations of ties with Russia, I will give you one example later. But before I tell you, I would like to remind you of the press conference that took place in May 2015, at which you were also present, where we talked about the AMIC company, our goals, and plans for the future. In addition, at the same time in 2015, but in June, another important event took place, at which the ambassador of Austria was present - we opened the first rebranded AMIC station.

Since then, in all these eight years, we have not had any problems, only these occasional articles. And although everyone knows me, no one ever asked me any questions about it, but the articles just kept appearing, which to me is an obvious sign of their commissioned nature.

Poland, Lithuania, and Latvia are other cases. I think that when something appeared in the media, it was usually related to Ukraine, because it is clear that there are also competitors there, and a competitor always benefits from creating rumors about another competitor. So, I would say, in Poland, Lithuania, and Latvia, we also have negative posts from time to time, but it's quite obvious where it's coming from, so I don't want to pursue this topic further.

Serhii Kuyun: I would like to switch to the main reason for the news — the ESBU statement about claims against the company. When I read these accusations, for some reason I remembered the same situation that happened to us last summer when a case was also falsified against us about tax evasion. And you know, reading the materials of the investigators then, I learned a lot about myself. Please tell me, what was the most surprising thing for you in these statements, in these materials?

Audrius Stropus: You know, when we worked for all these 8 years, some issues arose, but they were all resolved calmly, without tension. The war came - and we changed our focus to changing the logistics infrastructure, searching for fuel, continued to work, and did not see any problems at all. And when one day they came to the company with a search, it was very strange to me. And at the end of the day, when there was this search, during which they tried to find some unpaid taxes, when we had no claims, we were given a court order that the corporate rights have been seized. Well, what is the reason for this arrest, what is it based on? This is a very strange situation.

Then we began to study this case, we saw that it was fabricated: it was a case with some taxes, some dividends. And immediately after that came another court case. Arrest again, but already of our 308 objects. In addition, the trademark of trade in non-fuel goods was seized. Here is the sequence of these actions, considering that we are open to discussion, open to examining any issue. All our documents are transparent. We can discuss any unclear issue frankly without any tension. This is exactly the speed and sharpness of the decisions made, that was the biggest surprise for me.

Serhii Kuyun: I see several blocks of accusations, in particular, that dividends were allegedly paid to other companies. In my opinion, it is very easy to check everything. What is there really, can you comment on it?

Audrius Stropus: I can guarantee you that not a single dollar was paid for any dividends. All that we have earned, all the money is in our accounts here, in hryvnias. And all the time we invested in our gas stations and the economy of Ukraine. During this time, during the 8 years that AMIC Ukraine has been working here, we have invested about 30 million euros. Even today, this money that we invested, as well as other money, is in Ukrainian accounts.

Serhii Kuyun: That is, no dividends were paid at all?

Audrius Stropus: No dividends, no hryvnias have been transferred to anyone.

Serhii Kuyun: Gunter was not paid anything, right, for so many years?

Audrius Stropus: No one has been paid during these years.

Serhii Kuyun: Last year we did a study of the tax burden on each gas station, per liter of fuel in different networks. And I remember that you had a good result, one of the best, but yet it was different from the leaders. As I remember, this was because you did not have an income tax. That is, you did not pay it, what is the reason for this: the company did not make a profit?

Audrius Stropus: No, if we take a year separately, of course, we are already making money, but according to Ukrainian law, if there are previous losses, then they are summed up, and until we reach a total profit, then, according to the law of Ukraine, we are not obliged to pay income tax. If there was a different law, we would follow that law and pay income tax.

Serhii Kuyun: When and how did you develop such a loss?

Audrius Stropus: This loss was formed about 10-12 years ago, when we had loans in foreign currency, and because the exchange rate was changing, we constantly had a loss in hryvnia. And this loss, according to Ukrainian law, does not allow us to pay income tax.

Serhii Kuyun: But in the ESBU official statements, once again, Russian connections and Russian capital are visible. How is this reflected in the documents presented to you? Is there any fact based on which the tone of this statement was set?

Audrius Stropus: As far as we know from the information provided by the lawyers who represent us and have familiarized themselves with the case, an article from 2017 was taken as a basis for our connections with the Russian capital (an article from a Ukrainian website - author's remark). And based on this article, the connections between our and Russian companies are described. At the same time, there are no concrete facts that we have connections with any Russian companies.

Serhii Kuyun: Their statement specifically states that dividends were paid to companies with Russian owners. This is a serious charge. What is it about? By the way, it mentions two companies - what kind of companies are they? Because as far as I know, you seem to have always had one legal entity.

Audrius Stropus: It is described there that we paid dividends to the Lukoil oil company, but we have no connection with it. This company worked here legally. We only used to buy car oil from this company and sold it through our gas stations, because the consumer was used to this product. That’s it. When the war started, our relations came to an end. During the time that AMIC Ukraine and AMIC Energy exist, they have not paid any dividends to anyone.

Serhii Kuyun: So it was simply your counterparty? Are you not related to them corporately?

Audrius Stropus: We were buying to fulfill the buyer’s request, who comes to our gas station and asks for the oil that he has been buying for 15 years. I can say even more that officially here in Ukraine there were Russian companies that brought fuel legally before the war, but we did not work with them. Our main supplier of fuel was Orlen, Kremenchuk, and Mozyr plants, this is 90% of the total volume.

When the full-scale war started, Kremenchuk and Mozyr were no longer working, and the Lithuanian plant was working, but railway transportation through Belarus was closed. We buy it in Lithuania and bring it here by truck. Well, in the future, besides this, we have contacts with SlovNafta, in Poland, and others.

Serhii Kuyun: What are you going to do? Where do you plan to appeal? Maybe you already had contact with someone, how do you convey your position, what is the strategy?

Günter Maier: Of course, when we learned about this situation, about the seizure of our assets, it surprised us a lot, because in the last months of the war we very actively supported Ukraine. We were also invited to all important meetings regarding fuel supplies, including in Poland (this was a meeting between Ukrainian fuel suppliers and Polish government officials and oil companies in early May this year - author's note).

We were then surprised by these false accusations and this illegal seizure of our property, so we are appealing to the courts of appeal. Likewise, we also appealed to the Prosecutor General, the Austrian Embassy, and Austrian ministries. The Austrian minister also appealed to Yulia Svyridenko, the Deputy Prime Minister and Minister of Economy of Ukraine. We also sent an appeal to UkraineInvest, the European Business Association, and the business ombudsman. And we will continue to provide this information to all structures and appeal against this temporary seizure of our property.

If necessary, we will also protect our rights not only at the national, but also at the international level, and will file lawsuits in the International Investment Arbitration of the European Court of Human Rights.