Western Investor & Entrepreneur Claims Ukrainian Officials Extorting Him for Millions

This isn’t the first time Damerau has lost money after investing in Ukraine. According to the report, he claims he lost €25mn under former President Viktor Yanukovych after corrupt officials approached him regarding a wind farm in Crimea, and made similar threats regarding offshore entities, which he is again experiencing.

An Anglo-German businessman and a former adviser to Glencore, recently told a British-based paper that he is being blackmailed by a group of senior Ukrainian officials. The entrepreneur, Arnulf Damerau, has claimed that Ukrainian President Volodymyr Zelensky’s administration and other senior Kiev officials are trying to extort tens of millions of euros from him.

He is one of the largest private Western investors in Ukraine and co-owns Cosmolot (alongside entrepreneur Sergey Potapov), one of the largest online casino operators in Ukraine, and the country’s 10th-largest taxpayers. But the company’s accounts have been frozen after they were raided in October by the Economic Security Bureau of Ukraine, which has accused it of violating gambling laws and evading €560mn in taxes, according to the recent report.

The Ukrainian authorities alleged that copycat websites that share design and infrastructure with the company serve some of its clients, but don’t report the proceeds that they generate, a separate report said.

Damerau has claims that Ukraine’s accusations against his company have been fabricated. He has said that Cosmolot began operating in 2021, after Ukraine changed its gambling laws. He also claims that his total revenues last year were €208mn compared to €4.8mn in 2022 and €250,000 in 2021.

According to the report, the company paid €60mn in taxes last year, and Damerau said the state tax service signed off on its accounts in August. Damerau also claims that a Ukrainian individual met with him in Vienna and told him that the charges against his company would be dropped in exchange for his transferring the control of half of Cosmolot to an offshore trust.

“These are statements I don’t want to make. I don’t want to say these things about what is happening to me as a businessman trying to invest in Ukraine because the people responsible are in a minority, and they are betraying a young generation of Ukrainians who are giving their blood to try and give their country a European future,” Damerau said.

“This is a country which aspires to be part of NATO and the European Union, but what’s happening there right now — by a small minority — gives me déjà vu of the darkest Yanukovych times,” he added.

Critics of the Ukrainian president have claimed that senior officials have a pattern of going unchecked regarding corruption scandals in their departments, including former defense minister Aleksey Reznikov who was removed from office last September after his ministry was accused of procuring military supplies at flagrantly inflated prices.

The entrepreneur said he would address his concerns at the Ukraine Recovery Summit in Berlin in June, which he was invited to attend as a major foreign direct investor.