Ukraine moves to take control of bottled water producer IDS Ukraine

Ukraine's government is pursuing control of IDS Ukraine, one of the country's largest bottled water producers, in a shareholder conflict that involves Russian investors, the family of the late Georgian billionaire Badri Patarkatsishvili and the government of Georgia, according to a report by newsit.gr.

A 49% Russian stake, frozen since 2022

Russian investors hold 49% of IDS Ukraine, among them Mikhail Fridman, the billionaire founder of Russia's Alfa Group, who is under Western sanctions over his support for Vladimir Putin's government. Because of that holding, Ukrainian authorities froze the company's shares in 2022. The Patarkatsishvili family holds 34%, an investment made through New World Value Fund Limited. Georgia's government is among the remaining minority shareholders.

The family's holding passed in 2008 to Liana Patarkatsishvili, her sister Iya and their mother Ina after the death of Badri Patarkatsishvili, who built his fortune during the break-up of the Soviet Union. He moved to the United Kingdom in 2007 and died of a heart attack a year later at the age of 52, leaving an estate estimated at about £6 billion. The current dispute centres on the family's 34% stake in a company that owns some of Ukraine's largest bottled water brands.

ARMA seeks an independent manager

The case is being handled by Ukraine's Asset Recovery and Management Agency (ARMA), which has ordered that management of the company be transferred to an independent manager. ARMA head Yaroslava Maksymenko says the agency has repeatedly run into legal and bureaucratic obstacles, which she attributes in part to shareholders resisting the handover of control over the assets.

ARMA also says it was hit by a cyberattack while searching for an independent manager for the company. There is no evidence so far as to who was responsible, and the Patarkatsishvili family is not treated as a suspect. Maksymenko said New World Value Fund Limited, the vehicle through which the family holds its investment, had filed an unfounded complaint alleging illegal conduct by ARMA officials, which she described as “disinformation”. Ukraine's National Anti-Corruption Bureau is investigating those allegations of illegal conduct.

Nationalisation fight in court

Separate proceedings are under way before Ukraine's High Anti-Corruption Court, where shareholders are trying to block efforts to nationalise part or all of IDS Ukraine. For part of the Ukrainian government, the company is a strategically important asset in wartime. Maksymenko has raised concerns about possible money laundering and value extraction from IDS Ukraine if it remains under its existing management, while acknowledging that there are no official findings documenting such criminal activity to date.

The family rejects the allegations and says it has actively supported Ukraine since the Russian invasion began in February 2022. A spokesperson said the family is being unfairly targeted and warned that it would turn to international courts if necessary. “The Patarkatsishvili family firmly believes that an asset should not be taken away from shareholders who are not under sanctions and against whom there are no charges or concerns,” the spokesperson said, adding that the family would litigate abroad if Ukrainian courts do not rule in its favour and the asset is ultimately removed through the ARMA process.

• ARMA: wants management transferred to an independent manager; cites legal obstacles and a cyberattack.
• Patarkatsishvili family: holds 34% through New World Value Fund Limited; not sanctioned, prepared to go to international courts.
• Russian investors: hold 49%; shares frozen since 2022, with Fridman under Western sanctions.
• IDS Ukraine: denies financial violations and says operations have continued throughout the war.

IDS Ukraine says production never stopped

IDS Ukraine also rejects the allegations of financial wrongdoing. A company spokesperson said the group has operated and continues to operate in line with Ukrainian legislation, including tax and financial rules, and that no competent Ukrainian state authority, including the tax service, has established money laundering, illegal transfers of funds or comparable financial activity by IDS Ukraine. The company said it is not aware of any investigation or other active proceeding by Ukrainian authorities into such allegations.

The producer says it has not halted operations for a single day since the start of the Russian invasion, continuing to produce and supply drinking water to Ukrainian consumers during missile and drone attacks. A company spokesperson also dismissed as false ARMA's suggestion that the cyberattack could be linked to the group, saying the information is “simply false”.