Ukraine Targets Major Bottled-Water Producer
Ukrainian authorities are seeking to take control of IDS Ukraine, one of the country’s leading bottled-water producers, in a dispute involving Russian-linked investors and the British-based Patarkatsishvili family.
The family owns about 34% of IDS Ukraine through New World Value Fund Limited. The company also has a 49% interest linked to Russian investors, including businessman Mikhail Fridman, the founder of Alfa Group who is subject to Western sanctions.
Ukrainian authorities froze the company’s corporate holdings in 2022 following Russia’s full-scale invasion. The country’s Asset Recovery and Management Agency, known as ARMA, has since been tasked with finding independent management for the business.
The dispute has now developed into a wider legal battle over whether the state should ultimately take control of some or all of the company’s ownership.
ARMA Faces Legal and Cybersecurity Obstacles
ARMA chief Yaroslava Maksymenko says efforts to transfer the company to independent management have encountered repeated legal and administrative obstacles. She has also raised concerns about possible money laundering and the extraction of value from the business if its existing management remains in place.
However, Ukrainian authorities have not announced any official finding that IDS Ukraine has engaged in money laundering or other criminal financial activity.
ARMA also reported a cyberattack during an attempt to select an independent manager for the company. There is currently no evidence identifying who was behind the attack, and the Patarkatsishvili family has not been accused of involvement.
Separately, Ukraine’s National Anti-Corruption Bureau is investigating allegations concerning claims of unlawful conduct involving ARMA officials.
Patarkatsishvili Family Rejects Allegations
The Patarkatsishvili family disputes the Ukrainian authorities’ position and says it is being unfairly targeted despite not being subject to sanctions.
The family has argued that assets belonging to non-sanctioned shareholders should not be taken without allegations or findings of wrongdoing. It has also warned that it could pursue international legal action if its ownership is ultimately removed through the Ukrainian asset-management process.
The family’s stake in IDS Ukraine was inherited after the 2008 death of businessman Badri Patarkatsishvili, who accumulated significant wealth following the breakup of the Soviet Union.
IDS Ukraine has also rejected suggestions of financial misconduct. The company says it has complied with Ukrainian law, continued paying taxes and maintained operations throughout Russia’s full-scale invasion.
The company says its production and distribution network has remained active even during missile and drone attacks, allowing it to continue supplying bottled drinking water to Ukrainian consumers.
The dispute is now being considered through separate Ukrainian legal proceedings, while authorities continue efforts to determine the future management and ownership of a business regarded by some officials as strategically important during wartime.
