Big money doesn’t stink: how Yevhen Chernyak (didn’t) exit the Russian market

The OSINT community Molfar continues to investigate Ukrainian brands that, in our opinion, still have ties with the Russian Federation.

The first investigation addressed the activities of ELDORADO. This time, our focus is on the vodka business of the Chernyak family: we explain the current state of the Morosha, Shustov, and Khortytsia brands, demonstrating ownership schemes and business relationships between Russian and Ukrainian legal entities of the Global Spirits group from the start of the war until April 2022.

In March, Ukrainian Forbes published a news article stating that the holding company Global Spirits, which owns the Khortytsia, Morosha, and Shustov brands, withdrew its license for the production and sale of vodka in Russia. The company itself has not been supplying products there since 2014, it added.

The Molfar team managed to establish that the Chernyak family actually continued to profit from business in Russia after 2014. And after February 2022, it seems they only made nominal changes to the structure of their Russian business.

Yevhen Chernyak and AMG-77 Investment Ltd

An important element of the story is the Cypriot company AMG-77 Investment Ltd. It was through this company that Yevhen Chernyak—a businessman, participant in the TOP 100 Forbes, author of the YouTube channel Big Money, and the number one business speaker in the CIS—owned the Ukrainian company Global Spirits, founded in the early 2000s. The company is known to consumers for its alcoholic brands, such as Morosha, Khortytsia, Pervak, among others. Having achieved success in the local market, Global Spirits entered new markets, including the Russian one. Thus, Global Spirits Russia was established, which Yevhen Chernyak also owned through Cypriot AMG-77 Investment Ltd.

Throughout its existence, AMG-77 Investment Ltd changed its ultimate beneficiary twice:

In 2007, Yevhen Chernyak was replaced as the owner of the company by his son, Oleksandr Chernyak Jr., who was 16 years old at the time.
In 2015, a year after the annexation of Crimea and the outbreak of war in Ukraine, Oleksandr Chernyak Sr., Yevhen’s father, took over as the owner, replacing Oleksandr Chernyak Jr.

Yevhen Chernyak and Global Spirits Russia

The Cypriot AMG-77 Investment Ltd owned not only Global Spirits Russia but also two other Cypriot companies—Oxford AMG-77 Ltd. and MSD Marketing System Distribution Ltd. The names of the Russian and Cypriot companies are important because they controlled the companies that licensed the production of Chernyak’s vodka products in Russia. There were four such companies.

LLC “Rodnik i K” — part of Global Spirits Russia (renamed Tradition of Success in 2022), owns the trademarks Shustov and Morosha.
LLC “Trading House Megapolis” — a distribution company, part of Global Spirits Russia/Tradition of Success.
LLC “Russian North” — the legal entity behind the Vologda factory, owned by Oxford AMG-77 Ltd (99%) and Trading House «Megapolis” (1%) until April 2022.
JSC “Feodosiya Brandy and Wine Plant”— likely part of Global Spirits’ assets in Russia.

All these companies were responsible for the production and distribution of Global Spirits’ alcoholic beverages in Russia even after 2014. Moreover, the Ukrainian and Russian branches of the business continued to cooperate after 2014.

Yevhen Cherniak and his Russian business. OSINT dqxikeidqxiqqdant

This was the ownership scheme until April 2022.

As Chernyak mentioned, vodka shipments ceased in 2014. Everything else kept flowing to Russia: components such as bottles, labels, and corks were supplied by the companies according to the 52wmb portal. Additionally, imports also moved from Russia to Ukraine.

From Ukraine to Russia

In 2015, LLC “Ukrainian Distribution Company” (owned by Global Spirits until December 2020) supplied RODNIK i K with colorless glass bottles for Khortytsia Standard.
In 2017, LLC “Ukrainian Distribution Company” supplied “Russkiy Sever” with colorless glass bottles for Pervak.

From Russia to Ukraine

LLC “Global Spirits Group”— information is available regarding 29 shipments from Russia, including:

1 shipment from LLC “G-F Rus” (a Russian supplier of imported food products) in December 2021;
1 shipment in 2020 from LLC “TD Megapolis” By Order Of Global Spirits Amg Europe Ltd (Megapolis belongs to Russian GS assets);
3 shipments (1, 2, 3) from LLC “Ocil Sato” (a Russian manufacturer of labels) in 2021;
24 shipments from “Production Unitary Enterprise Alcopack” (a Russian alcohol packaging manufacturer), including the most recent one in January 2022.
LLC “Global Spirits Europe” (GSE) received 10 shipments of stoppers with logos from the Russian “Production Unitary Enterprise Alcopack” (a Russian alcohol packaging manufacturer) until February 2021.

It is important to emphasize that until February 24, 2022, the Cypriot company AMG-77 Investment Ltd owned the entire alcohol business licensed by Global Spirits for the Russian market through a number of other companies. And control over AMG-77 Investment Ltd was in the hands of the Chernyak family.

As in Ukraine, in Russia, the Khortytsia brand and others had strong positions and were consistently listed among the top sellers. The company sold a lot and paid significant taxes.

The OSINT community Molfar calculated a minimum of $14 million in taxes paid to the Russian budget by companies controlled by AMG-77 Investment Ltd over the past eight years.

Taxes paid by companies from 2014 to 2021, according to the Russian Federal Tax Service and Rosstat, and the average annual exchange rate of the ruble to USD.

Chernyak’s father, who also owns a cable manufacturing plant, "the heroic relocation story" of which was recently described by Forbes, did not stop conducting business with Russia either.

In just two months of 2022, the Zaporizhzhya Non-Ferrous Metal Plant, owned and managed by Oleksandr Chernyak Sr., supplied cable products to Russia three times (1, 2, 3) amounting to $275,000 (according to 52wmb portal data). The last shipment took place on February 24, 2022.

Yevhen Chernyak and his Russian business. What changed after February 24, 2022

On the first day of the full-scale invasion, the company Global Spirits revoked its license to produce and sell products in the territory of the aggressor country. Molfar observed what happened next.

The often-mentioned Cypriot company AMG-77 Investment Ltd ceased being the owner of Russian legal entities in May 2022. The new owner of all the Russian companies previously controlled by the "Cypriots" became a man named Oleksandr Bespalov.

Neither Ukrainian nor Russian journalists managed to find information about the transactions. This raises an important question: Khortytsia was the sales leader in the Russian market. Why did the manufacturing plant and the licensing company change ownership without demonstrating the deal? Contacting Bespalov was not successful, but he is not unfamiliar with the entire business of AMG-77 Investment Ltd.

Yevhen Cherniak and his Russian business. OSINT

This is how the ownership scheme looks at the time of the publication of this study.

Bespalov was the chairman of the board of JSC "Feodosiya Brandy and Wine Plant" back in 2020. At the same time, he likely worked at LLC Trading House Megapolis. In other words, Bespalov was likely a manager of several companies that belonged to the Cypriot company already owned by the Chernyak family.

The practice of American and European companies demonstrates the format of alienating Russian business in favor of its management as one of the ways to leave the market. Yevhen Chernyak doesn’t talk about this because he never acknowledged having business in Russia. Furthermore, materials published on this topic were subjected to strict censorship and removed from Google search.

Until this publication, journalists could not find his connection to the Cypriot AMG-77 Investment Ltd, and therefore also could not trace the link with Oxford AMG-77 Ltd and MSD Marketing System Distribution Ltd, which were controlled through the aforementioned company. This meant an inability to track the entire Russian business.

So, it seems no deal occurred: we just have a pool of companies selling the number one brand in the market, paying several million dollars in taxes annually, and having more than three thousand employees that change ownership. And Global Spirits Russia changes its name to a more understandable one for the Russian establishment—Tradition of Success. Quietly and without much noise. Notably, Bespalov notes his education at the FSB Academy and holds Russian citizenship.

What is happening with Khortytsia, Shustov, Morosha brands in Russia now?

All Ukrainian brands attempted to find a new name that would not differ too much from the previous ones. According to the register, the trademark "Shustov" and "Morosheya Lesnaya" were registered to "Rodnik i K" in September 2022 and January 2023, respectively.

And what about the glorious Cossack Khortytsia? We managed to obtain access to photos of the "new" brand Khorta. These bottles can be found, for example, in Russian Auchan stores. The indicated manufacturer is LLC “Russkiy Sever.” The TM "Khorta" with an identical name was not found, the only known TM "Khorta" was registered in 1992 to the Zaporizhzhya KP "Khorta" and has been inactive since 2001. So what comes next?

Why is Chernyak still associated with Russian business?

Among all the evidence that we believe directly or indirectly points to the nominality of the agreement between AMG-77 Investment Ltd and Oleksandr Biespalov, the Molfar team has found another.

In June 2022, just a month after the "liquor deal of the year," a legal entity which may belong to the Ukrainian Global Spirits group registers the trademark "Shustov" in Russia, and thus it seems the company continues to have a presence in the Russian market.

The legal entity that registered the "Shustov" trademark in Russia is called GSH Trademarks Limited, and the company also holds the rights to the "Khortytsia" trademark in Ukraine. In 2007, the owner of GSH Trademarks Limited was Cyprus-based Oxford Amg-77 Limited, and as of February 2023, it is Global Spirits Amg Europe Ltd. Meanwhile, Global Spirits Amg Europe Ltd has been owned by the registrant Signa Consulting Trust Reg since 2021, and in 2020 it was owned by Yevhen Chernyak. Furthermore, Global Spirits Amg Europe Ltd owns the Ukrainian LLC "Global Spirits Group."

Why do this?

We assume it’s to not lose the market. Again, this is a typical practice for many European companies that leave their Russian business to local management with the right to buy back the business over 5, 10, or even 50 years. The brand names haven’t changed much, and the bottle shapes seem preserved. We can assume that Chernyak’s team plans to return to the large alcohol market in Russia and therefore does not want to lose their connection with it. Or the earnings.

And there is a reason to compete: by various estimates, the sale of Khortytsia in Russia alone could earn the company more than $8 million annually.

Skelet.info