Rise of an Oligarch: The Way It Is: Book One

by Carlito Sofer

  “Gigo, Revaz...hold this son of a bitch on his knees and keep him quiet. Gigo: give me your gun.”

  Revaz covered Vova’s mouth with a heavy duty masking tape. His protests and begging stopped as he resigned himself to his fate. He stared at me with his eyes almost bulging out of their sockets, trembling with fear and shaking his head. I was trembling too, hoping nobody noticed.

  “Cover his eyes too,” I demanded.

  I slowly screwed a silencer onto the firearm, focusing all my attention on the gun in my hand, ignoring the others. I then held it up, and pointed it at Vova’s forehead.

  “You’re a fucking traitor. After I gave your life some meaning, did you think that I wouldn’t touch you because the new minister extended you his helping hand? Your new master will come to me soon, after realising that he cannot substitute my operation with his. You made the wrong choice, Vova. You know the punishment for traitors. God have mercy on your fucking soul.”

  Vova started wriggling, but Gigo and Revaz held him in place. I placed the silencer against Vova’s forehead and pulled the trigger. His head yanked backwards and a small ribbon of blood trickled from the wound. Gigo and Revaz stepped away, letting his body fall back to the ground. I stood over the body and took one last look at the traitor before delivering a double-tap. I handed the gun back to Gigo and wiped blood splatter from my forehead with the back of my hand.

  “Wipe it off, remove the silencer, then put the gun in his hand and dump the body of this shithead next to the Dnieper.”

  “Next to the river? Is that wise, boss?” Boris asked, calling me boss pointedly.

  “I want the body to be found. I don’t think anyone will betray us again. Spread a rumour that he started to work for a competitor just before he died. This needs to look like a suicide but the people that matter need to understand that it wasn’t.”

  “As you wish, boss.”

  “Good job, you two,” I directed at Gigo and Revaz. “There will be a bonus in your next wage.”

  Gigo and Revaz smiled, and then nodded deferentially. Respect for the boss was prerequisite in this business, and I’d proved myself worthy of their loyalty.

  “Thank you, boss. Good job,” Gigo growled.

  I left the others to deal with the body, and drove home. On the way I started shaking as the adrenaline left my body, so I pulled over when I saw a real shithole of a bar, went in, and ordered a bottle of vodka. I drank three shots in a row to calm my nerves.

  I felt like Michael Corleone in The Godfather, when he killed Virgil Sollozzo and the corrupt Police Captain McCluskey because Sollozzo had attempted to kill Vito Corleone, Michael’s father and the capo di tutti capi: the Corleone family’s Godfather. It was Michael’s first brush with the family business. He had never killed before but he stepped up and murdered two men who threatened his family. A man has got to do what a man has got to do. There would be no turning back for Michael after the killings.

  The police investigation was completed within a week, with the conclusion that it was a suicide. So what if the suicide note contained a few typical misspellings of Georgian among the Russian, and Vova wasn’t even Georgian? The man was clearly a magician as he was able to shoot himself three times in the head before perishing and going to hell.

  The documentation that Vova stole never surfaced. Either Vova didn’t have a chance to pass it on or the people who received it understood that they didn’t want to mess with me. Those who needed to know who killed Vova, knew it was me. The message was loud and clear.

  It had been the hardest thing that I’d had to do in my life, but it was necessary to protect my business, my friends and my family. I had to do it myself since I was the boss, and in my mind the boss should be both judge and executioner. Only wimps ask their people to do such things for them. I had executed a man. However, in Vova’s case I never regretted that I did. If his move had succeeded, it would’ve been my corpse fished out from the river, as I had no illusions about what the new minister was capable of doing to take over my share of the market. As the Americans would say, this was pre-emptive retaliation.

  I’d proven to myself that I had the guts to deal with such situations. I felt that I could defy ministers and government officials and come out with the upper hand. I felt that I had what it took. I was the capo di tutti capi, the boss of all bosses.

  On that rainy day, the oligarch was born.

  11 Boris

  Kiev, 2013

  With the boss helplessly lying in a coma, stable but with no signs of waking any time soon, Boris flew back to Kiev to take care of things and see how the investigation was proceeding. Arthur would keep an eye on Masha and the children, and if there were any developments, it was just a short hop across the Med if he was needed in Tel Aviv.

  Boris reclined in the comfy first class seat and closed his eyes. His mind drifted back to when Anton Lozinski first introduced Misha to him. It felt like centuries ago. Boris was a respected and powerful manager of a state company with solid ministerial backing. He had prolific connections and promising career prospects, either as a manager or a politician, if he decided to join the ministry. It took him years, but he managed to master all the secrets and politics of moving up the hierarchy, primarily by licking the balls of his superiors and playing the perfect tyrant with subordinates.

  It had taken time to develop some respect towards Anton, who as deputy minister was his superior, albeit almost ten years younger in age. And then one day, he had called Boris and told him that the day after he was going to introduce him to Mikhail Vorotavich, the future owner of the factory and soon to be the new boss.

  Boris was speechless for a few long seconds. But soon, he came to his senses and said that he was looking forward to the meeting.

  After the introductions and meeting the other board members, Boris invited Anton and the new boss for a meal. As the lunch unfolded he gradually warmed to Mikhail. He was surprised that the young man seemed to quickly grasp all the nuances of the business. Clearly, he wasn’t some stupid spoiled rich brat. Boris understood that this kid was a self-made millionaire who started from nothing. Boris admired that. At the end of the meal, Misha told Boris to stay behind with him when Anton left.

  “Thank you, Boris. I would like to spend some more time with you to better understand the business.”

  “That’s fine, Mikhail. I’ll be happy to share with you all the secrets of running a factory. Sometimes you need more than managerial skills.”

  “That’s good. But please, call me Misha.”

  From just an hour spent together, Boris managed to discern that the young man was going places, and he could join the ride if he so wished. Something about Misha made Boris inclined to bet on the boy. And damn, was he right! Yes, the kid lacked connections. And yes, he didn’t have the finesse of those who grew up in the old system. But his audacity and killer instinct compensated for all those minor shortcomings.

  Boris wasn’t considering his retirement even though he was nearing the age. He never married and didn’t have children. Working kept him going and he was afraid that once he retired he would get bored, sick and die. He didn’t have any real hobbies, apart from drinking alcohol, spending hours in the sauna and having sex with prostitutes. So what would he do without his work? Go fishing?

  Siding with Misha turned out to be a great decision, and before long Boris was reaping the rewards of their close relationship, with a flash new car, a luxury apartment, and a hot young girlfriend to keep him warm on the nights he wasn’t shagging prostitutes in a VIP room of one of Kiev’s swankiest nightclubs.

  Boris wasn’t young anymore, and his heavy drinking left black holes in his recollection of what happened the night he met his latest girlfriend. Mixing alcohol with the pills that he was taking for reducing his cholesterol and blood pressure had a toxic effect. But he could give up neither the pills nor the alcohol.

  He remembered waking up with an extreme hangover, looking around and noticing the flowers near his bed. He took
the flowers out of the vase and drained the water in a single gulp. After quenching his initial thirst, he staggered to the kitchen where he was surprised to see a strange girl drinking coffee, wearing his button-down shirt. The girl looked up from a newspaper and smiled.

  “Good morning, lover, although from your look this morning would be good for you only in the afternoon,” she said smiling. “Do you want a cup of coffee?”

  Still dumbstruck, Boris just nodded. He watched the girl pour a fresh cup for him, and tried desperately to piece together what had happened the night before, but the memory wouldn’t come to him.

  “Yesterday was nice, very nice. You’re like a cuddly bear, Boris. A cuddly, naughty sex-machine bear,” the girl said as she handed Boris the steaming cup.

  “Err...thank you…err,” Boris managed to stutter.

  “It’s Natalia.”

  “I’m sorry?”

  The girl smiled at Boris.

  “You’re trying to remember my name, aren’t you? I’m not surprised your memory is cloudy. You were pretty out of it last night,” Natalia said, taking a seat at the breakfast bar.

  So, this was Natalia. She was just there, in Boris’ apartment, wearing nothing more than his shirt. Not even panties. Boris studied her carefully as she sipped at the hot coffee. Her blonde hair, blue eyes, young body and silky long legs were spectacular. And her face! She was stunningly beautiful.

  As Boris couldn’t remember whether they’d had sex already, he didn’t want to leave this particular issue undecided. It was a good opportunity to satisfy his morning libido, which was amplified by a peek at the girl’s neatly trimmed pussy, just visible under his shirt. A good method of fighting a hangover was some intense sexual activity. He casually bent Natalia over the bar and took her from behind right there in the kitchen, without saying a word.

  Since that morning Natalia had stayed with him.

  Boris grew up in the old world of communist USSR. The new world, capitalist Ukraine, required a completely different set of skills and a completely different mind-set. Boris considered himself lucky that Misha believed in him and gave him the opportunity to adapt to the new world. Only those who were able to adapt to capitalism would be successful. Misha was one of the new breed, young enough and ambitious enough to adapt.

  Some of the skills that worked under communism were still useful under the Ukrainian distorted version of capitalism. Under communism you had to work the system to get anything or anywhere. If you just followed the rules, you got nowhere. These same skills were necessary under capitalism too, if you wanted to make exceptional amounts of money.

  Boris knew how to do it and he had old-school friends in strategic positions. The old Soviet comrades took care of each other since they appreciated the mutual benefits of doing so. They were their brothers’ keepers. You do for me and I do for you. Manus manum lavat, as the Romans defined it centuries ago. He thought that Misha and he made a good team, complementing each other’s skills perfectly.

  But now Misha was lying in a hospital bed, hanging between life and death. Boris wished him to wake up. It would be boring without him.

  12 Aim High

  Kiev, 1997

  The combination of the massive privatisations in Ukraine and having Boris on board brought a new set of incomparable business opportunities. Being the right person at the right time had never been truer. The right person was Boris with his connections, and the right time was now when the state was selling assets at bargain prices.

  All I needed was the money and the appetite to take a risk. They say that most failures aren’t of those who aim high and miss but of those who aim low and hit the target. I aimed high. Always high. The target this time was Ukraine’s lucrative metal industry.

  Metal production, especially the iron and steel industry, is the dominant heavy industry in Ukraine. Ukraine is the world’s eighth largest producer and the third largest exporter of iron and steel. After Ukraine’s independence, the privatisation wave that swept the country didn’t pass over iron ore mining companies and iron and steel mills. They were all up for sale.

  Under communism everything was planned ahead. Now, under the free market, the factories had to compete and find suppliers and customers. They needed to adapt to the new world, but adapting takes time. Turmoil and privatisation led to opportunities.

  The funny thing was that the metal factories were gigantic, employing tens of thousands and sometimes over one hundred thousand workers. However, out of all those employees there wasn’t a single salesman who knew how to sell what they manufactured. There was just no need for salespersons under communism. For the archaic Soviet management teams at these factories, to organise new supply chains and organise export deals, was virtually impossible.

  Boris was well connected with senior people in the government and the State Property Fund of Ukraine, which was responsible for the privatisation. As a fellow manager of an energy company, he had close relationships with the managers of some of the largest metal factories. We decided to target Lugansk Steel, in the east of the country in the Lugansk District.

  We obtained insider information that the factory, which employed seventy thousand workers, had a privatisation plan in place. According to the plan the suppliers of the factory would get 10% of its shares, the employees would get 10%; 40% would be offered to large institutional investors through a tender and 40% would remain under state control. We needed to get 51% to achieve complete control over the factory.

  The privatisation plan aimed to offer a sufficiently large stake in the company to attract a strategic investor capable of financing the factory’s modernisation. It also aimed to leave the state on par with the investor, so it kept partial control over the factory because of its strategic importance to the Ukrainian economy as a major employer. We, however, had a plan to counter the privatisation plan.

  To buy 40% of the shares that were offered via a tender we needed to borrow some capital. My group didn’t have enough money for such a large investment and anyway I didn’t want to risk the Group’s funds. Ukrainian banks weren’t an option as lenders, since interest rates were in double digit figures. I expected to realise a return on the investment within two to three years so this option wasn’t economical as interest payments would be too demanding. Bringing financing from abroad was almost unheard of at that time, with no foreign institution wanting to lend money to Ukrainian corporations.

  Miraculously or not, David kept nagging us for three months with incessant demands for documents, collaterals, due diligences and other bullshit that I couldn’t stand. However, he managed to bring us a seventy million US dollar credit line from Oldman Sucks, the renowned American investment bank. This was unprecedented.

  The guys at Oldman were smarter than those in any other investment bank because when they smelled money they were like sharks smelling blood - they wanted a piece of the action. I didn’t trust them, but we needed them, or more precisely we needed their money.

  We issued convertible debt against the loan since Oldman wanted the option to convert some of the loan to equity. This was great as it was a sign of confidence in the deal. David somehow convinced or bullshitted the bankers that we were good to repay their loan.

  David was learning quickly.

  The simple part of the deal was incorporating Neplokho Metal, which bid and won the tender. This gave us 40% of the shares. We needed another 10% and a bit. To get the 10% that was distributed to employees we had to pull some rabbits out of the hat.

  To start our plan in motion, Boris arranged a meeting with Stepan, the manager of Lugansk Steel. Stepan was a tall, once physically strong man in his late forties, who was unable to deal with the ever changing reality around him. His way of coping, like many of his countrymen, was to bury his head in a bottle of vodka at every opportunity.

  Boris somehow convinced Stepan, with a small monetary incentive and a promise to keep him employed after we took over his factory, to delay paying the salaries of the workers. The withhol
ding of salaries would commence a few months before the workers would receive their shares.

  To convince Stepan to play ball, Boris invited him to a resort in the woods where he could begin the softening up process. A driver went back and forth to the city, constantly supplying fresh girls, drinks, food, a live music band and whatever else was necessary. On his way back, the driver transported empty bottles, clothes stained with vomit, food, spunk and other hints of what was happening in the resort. Boris paid for everything, so Stepan wasn’t holding back on his indulgences.

  Boris and Stepan drank whisky and vodka for five days straight, fighting morning hangovers with some beers. As respectful and conservative senior managers they adhered to the classic ritual of drinking in the entrance room to the band’s accompaniment, sweating in the steam room, shagging in the washing room and drinking again in the entrance room.

  Thankfully, the effort wasn’t a futile exercise, because Stepan finally agreed to our proposal. Poor Boris had to sacrifice his body for the greater good. I promised him a fat bonus if we took over the factory, and an all-expenses paid stay at the Truskavets mineral water resort to take care of his liver.

  On the day that the workers received their shares we hired a few minibuses to drive through the neighbourhoods and villages in which they lived. They were literally starving after not receiving their salaries for the previous few months. We offered them cash and a bottle of vodka for their share certificates, and they gladly parted with their shares. We had a notary on each minibus to affect the sale on the spot.

  After three days of going through neighbourhoods and villages, we collected 9.5% of the shares for peanuts, and a few crates of vodka. The workers didn’t know what the value of a share certificate was and were happy to get some cash to buy food. They were too starved to ask questions.

  Eventually, we collected almost 50% of the shares, but needed another 1% to pass the 51% hurdle and achieve complete control. It required some creativity and this is something that I had no shortage of.