A native of Pakistan, a British-Ukrainian businessman, a billionaire and a philanthropist Mohammad Zahoor in an exclusive interview with the FD is talking about how his business began, about a charitable project initiated by his wife, a well-known pop singer Kamalia, and why he is not interested in Ukrainian politics…
You started your business in Ukraine in the 1990s. It was a difficult time for Ukraine and for business. What prompted you to start a business in a difficult time and in a difficult country?
– We did not start business here, but in Russia.
We came here afterwards. At that time, our company was a bridge between Ukrainian and Russian organizations. After the collapse of the Soviet Union, it turned out that many business entities owed each other. For example, the plant owed the port, railways and so on. We bought ore, coal, we paid for rail transportation and we financed the production and delivery of the produced goods to ports. So our activities began throughout the former Soviet Union, where there were metallurgical plants.
Meanwhile, the Donetsk Metallurgical Plant owed us over 20 million dollars. It was impossible to get this debt, and since the plant was put out to privatization, we decided to privatize it and withdraw our money. It turned out not quite as planned. The plant was almost dead and we had to invest a lot in it. Thank God, at the time the metallurgy was not paid much attention for, because the contributions to metallurgy are long money, which, as a rule, is paid back only after 10 years. Then it was not interesting. Alcohol, night clubs, casinos and gambling houses – it was an object of interest. Therefore, we managed to survive the difficult period without much stress.
We started having difficulties only when steel, that is to say, became fashionable – that is, when it became clear to many that metallurgy could make one rich. But we have coped with these complications.
What is the rate at which the Ukrainian economy is pulsing now?
– The Ukrainian economy now resembles a person who has had artificial ventilation of the lungs. Ukraine was a very economically strong country. Initial capital of Ukraine was better than in many post-Soviet countries. Better, than in Russia. Unfortunately, in Ukraine there was no leader who would have perceived it as their country. Ukraine was perceived as a foreign home where jewels lie, and these jewels could be stolen. As soon as we are told that we are having upturn, we are talking about the fact that our economy is at the bottom. Therefore, there is only one way – the way up. Gross Domestic Product (GDP) fell by 15% in 2014. Its growth is at a rate of 2–3% per year. In order to reach pre-war and pre-revolutionary levels, we need at least 5 years more.
You are one of the few businessmen who are engaged in patronship and philanthropy. One of your projects is YUNA Music Award. Do you consider this project as purely philanthropic or does it still have business interests?
– There was no patronship there. From the beginning it was a commercial project. We started it, guided by the best thoughts. There are a lot of good artists in Ukraine, including my wife (a famous singer Kamalia – Ed.). But, unfortunately, in Ukraine there is no normal premium. We also took into account the fact that Russian awards (more than 50%) are received by Ukrainian stars. Why cannot they get their national prizes at home? On this basis, we decided that Ukraine is worthy of such a prize and such a competition. We would like this premium to be honest and clean, not politically motivated.
Anyhow, during the first three years nobody believed in the honesty of this premium. All the artists offered us a great amount of money for it.
In the fourth year, they finally realized that the premium was honest indeed. We have 150 jury members. It is virtually impossible to bribe each of them. All jury members are from the world called show business. It is the right of each of them to have their own sympathies. Though it is true, it happened so that afterwards famous artists stopped coming to us. They began to fear that they would come to our competition, and the victory would be gained by someone from their competitors. Therefore, the premium and the competition began to be considered as a starting point for creative youth. It was our competition that gave a kind of “ticket to life” for great performers like Hard Kiss, Monica, Ivan Dorn, Onuka. This premium is already seven years old, but we still subsidize it. Unfortunately, our premium did not have any single channel partner that would show our competition. For a while, the contest was broadcasted on the Inter channel, but anyway this channel is more aimed at older people. Then we were broadcasted by the youth channels – Novyi and M1. But M1 recently, for some reason, considers us to be their competitors. This year our contest was to be broadcasted on M1, but the broadcast did not take place due to instructions from the media holding company that were not completely clear to us. We showed our contest on the Live Channel. This year we have a powerful partner – the channel 1+1. We have an agreement with this channel and many radio stations, as well as publishers who will fully support us. Thus, we already have quite powerful media support, and this is quite enough for us to have serious sponsors. Also, we have an agreement with the Hilton hotel, which has already become one of the sponsors of our competition, and all the competitive events will be held there. I do not mean the concert itself, but such important components of the competition as the pre party and after party. Also there will be an international jury on the second stage of the competition this year.
You also supported the Ukrainian Hockey Federation. Many people of your level are more inclined to support football. They buy football clubs, create football teams. You are attracted to hockey. Why?
– Well, first of all, I had a football team. It was part of our factory. This team is the Donetsk Metalurh, which we finally handed over to Mr. Taruta.
Simply put, we presented him this team because it was loss-making. If you do not do money laundering, you have nothing to do with football. And we, unfortunately or fortunately, do not do this. Therefore, it was easier for us to present the football team than to keep it. Although we have kept a mini-football team and won the championships and cups until recently. Well, and secondly, even in those days when I was a student, hockey held the superiority of popularity, not football.
Unfortunately, Ukraine has never been a hockey country. Even in the Kyiv hockey team “Sokil” there were the guys that used to play, let’s say, from Novokuznetsk and so on. We decided to change the situation for the better and have done a lot for that. Kamalia even presented a cup to the hockey association, made from a magnificent stone that is extracted in Siberia. After us hockey started to be of interest. Mr. Kolesnikov and Mr. Taruta created their hockey teams. For a long time they kept the women’s handball club “Academy” from town of Irpin.
When it comes to sports, I cannot but ask you about such an unusual game for Ukraine – cricket. You hold an annual cricket tournament for foreigners living in our country. Do the Ukrainians participate in this tournament?
– Very few. A young priest from Australia lives in Kaharlyk. He has good relations with local authorities. He managed to organize a more or less good stadium, where he teaches the Ukrainians the game of cricket. When we are holding a tournament, these Ukrainians come to Kyiv and take part in it. But mainly foreign entrepreneurs and students studying in Ukraine are involved in the tournament. We tried to enter the world cricket association, but so far this is not possible due to the small number of players.
The women’s team was not able to be created at all, and the creation of a women’s team is one of the prerequisites for joining the world cricket association. Therefore, we just run an annual tournament, to which we are trying to bring known cricket players, either from Pakistan, from Sri Lanka, or from India. Cricket is the same game as football, and if a person is really committed to it, they will play in any country and in any pitch.
Among your business interests real estate and media are often mentioned. In particular, you showed interest in the “Leipzig” hotel, for a fairly long period you were the owner of the English language publication “Kyiv Post”. You got rid of these assets. Why?
– The media does not make a profit at all. “Kyiv Post” was a true patronship. This edition was not a business for me. I took it because it was being closed. I bought this brand and we continued its activities in the spirit in which the edition had worked from the time of its foundation. Perhaps, with us, publications have even become sharper.
We were lucky because Viktor Yanukovych was the president at that time and many publications were suppressed. Our newspaper continued to write everything it wanted. In addition, we have made it clear to Yanukovych that pressure on the newspaper or an attempt to close it will have negative resonance in the world. We were also lucky to have few English readers in Ukraine.
Our newspaper was designed for expats, for foreign language students, for foreign embassy staff , accredited in Ukraine, foreign ministries of foreign affairs, business abroad and diaspora.
This was our audience. 70% of our readers were abroad at all. On this basis, Yanukovych’s people realized that this newspaper has no impact on the masses, and left us in calm. Of course, there were attempts to pressure the newspaper. There were attempts to redeem it.
But we were able to stand it. We invested more than five million dollars in “Kyiv Post” and each year the amount of investments increased.
I invited many foreigners, people who could continue our line in the newspaper to redeem the newspaper. There were potential buyers, but I was not certain that they would maintain the publication at the proper level. The person that I finally sold “Kyiv Post” to keeps the word and keeps the high standard set by us. I was often asked why I presented conditions when selling the newspaper. I replied that this newspaper belonged to me for nine years and I do not want anything bad to happen to it. As for real estate, in Ukraine it has fallen in price by 4 or even by 5 times. Everything that cost 100 million costs 20.
Real estate rises in price not with the speed with which it has fallen.
In 5 years, real estate may come to the level of 2014 in prices. As for the “Leipzig” hotel, we did not sell it. The media are mistaken here.
We are looking for partners and buyers, but we would not want to sell it too cheap. Even today, from “Leipzig” you can make a three-star hotel and in such a position to wait for the next 5 years, wait for the stabilization of real estate prices and transform Leipzig into a five-star hotel. Our plans are to turn it into super elite apartments.
Unfortunately, none of these plans will provide us with profits. We have already invested 90 million in Leipzig, but the return of this money is not yet visible.
What kind of charity events are you planning this year?
– My wife, Kamalia, is more concerned with charity. I just support her. She is currently dealing with a children’s cardiac centre. We are helping and will continue to help the cardio centre in terms of equipment purchase. We control the delivery and installation of this equipment. The 10 monitors of a total value of 15 million UAH, donated by us this year, can save up to 100 lives a year – on one machine. In 10 years it will be possible to save up to 1000 people on one machine. In total – 10 thousand people in 10 years. 10 thousand happy families – it is very important for us. Unfortunately, we are not always able to check if our charity help comes to its destination. We do not always know if this help is being used. In the case of a cardio centre, we know that our money will help to save lives, and children are the very category Kamalia wants to help. Here we see the result.
Have you ever wanted to enter Ukrainian politics, perhaps not personally, but through the creation of a political party?
– Criticism is always much easier than creating. It is not as difficult to see and state the shortcomings as to eliminate them. I have never wanted to be engaged in politics – neither in Ukraine, nor in my country, nor in England. I am a non-party person, regardless of my personal sympathies. My experience of participating in politics was limited to participation in the support of the first president of independent Ukraine, Leonid Kravchuk, when he competed with Leonid Kuchma. We were invited to television and asked to speak out on Kravchuk’s support. But he lost the election, after which I realized that the politics was not for me. It was a good lesson.
However, in 2004, during another confrontation between Yushchenko and Yanukovych, we were the only ones providing the territory in Donetsk, where Yushchenko was able to speak.
How do you see the future of Ukraine?
– In the end, Ukraine will be a successful country, it has all the ingredients to become strong and prosperous, but because of human misery Ukraine is now a failed state. It does not fi t into the head, as having all that is necessary for success, Ukraine cannot reach it. Therefore, we need only one person who will come to politics not to multiply his wealth, but to care for the country. Howard Schultz, a Starbucks shareholder, left his business and intends to run for the US presidential election in 2020 not to increase his own revenues. He goes to politics because he does not agree with the actions of the current President of the United States and wants to raise the prestige of his country. Once you have such a person, Ukraine will become a successful country.
