JIRI KOMINEK profiles some of the ultra-wealthy wheeler-dealers emerging across the former Eastern Bloc and examines how they made their fortunes

CZECH REPUBLIC
ZDENEK BAKALA

Although Zdenek Bakala is not the wealthiest Czech, his empire is growing quickly. Less well-known than financial tycoon Petr Kellner, whose current fortune is estimated at €2.7bn, Bakala is taking steps to ensure that his current value, estimated at €340m, will increase sharply following a number of savvy business ventures scheduled to take place in 2007.

During the 1980s, Bakala – then a young man in his early twenties – decided he’d had enough of communism and opted to emigrate to the US, where he earned a degree in Economics and subsequently became a banker. Following the dramatic events of 1989, with the so-called Velvet Revolution and the collapse of the communist regime, Bakala returned to his native country and headed the Czech and Slovak branches of Credit Suisse First Boston.

Shortly after the Velvet Divorce, which saw the break-up of Czechoslovakia into the Czech Republic and Slovakia, Bakala established a private banking and brokerage firm called Patria Finance and began accumulating capital in the murky waters of the local markets.

In 2004 Bakala’s RPG Industries, via London brokerage firm Charles Capital, bought Karbon Invest, a Czech holding company controlling majority stakes in the country’s two coal mining companies, OKD and CMD. These two businesses were later merged, and only the name of the former has been retained.

Through RPG Industries, Bakala then established a Netherlands-based company called New World Holdings, which now officially controls 81% of OKD. New World Holdings plans to release an IPO in London during the second half of 2007 – and with that, Bakala will probably become a full-fledged billionaire.

Bakala’s plans do not end there. Currently he is eyeing potential acquisitions in the form of coke and coal companies and railways in Poland, Ukraine and Russia.

SERBIA
PHILIP ZEPTER

Serbian-born Philip Zepter (55) has gained a reputation as the “pot and pan king” thanks to his successful Austria-based kitchen utensils company Zepter Handels.

Born Milan Jankovic, he emigrated to Austria from the former Yugoslavia in the early 1980s as a young university graduate with a degree in Economics. After working as a pot and pan salesman for AMC, he changed his name to Philip Zepter (using the maiden name of his grandmother) and set up his utensil-making business in Linz in 1986.

Zepter International, as his empire has come to be known, is today estimated to be worth €3.6bn and makes everything from frying pans in Italy to surgical instruments and cosmetics in Switzerland. Zepter also has an office and sales network across the globe employing more than 100,000 people.

Although a resident of Monaco, Zepter has not entirely given up his Serbian roots; he owns a shipbuilding business in Belgrade, as well as insurance company Zepter Osiguranje and local mobile phone operator Zepterfone.

In March 2006, Zepter sold 75.1% of Zepter Banka to Hungarian bank OTP for €31.4m.

Zepter has been the target of numerous attacks on his integrity, in the past being accused by his fellow Serbs of buying local politicians. The media has accused him of gun running and cooperating with the former secret police loyal to Slobodan Milosevic. Brussels-based NGO the International Crisis Group (ICG) has accused him of money laundering and arming the Republika Srpska, the autonomous Serbian part of Bosnia-Herzegovina.

Zepter has dismissed all accusations and has won several libel suits against the press. He is currently suing the ICG, which during the summer of 2006 sacked the director of its Belgrade office responsible for spreading the allegations.

Zepter likes to keep a low profile and little is known about his personal life apart from the fact that he is a close friend of Monaco’s Prince Albert II and apparently plays golf with the likes of Kevin Costner and former German tennis pro Boris Becker.

POLAND
JAN KULCZYK

Poland’s wealthiest entrepreneur for the past seven years has been Jan Kulczyk
(56). It isn’t clear how Kulczyk made his initial fortune, but today he is estimated to be worth €1.2bn after he sold his 24.6% stake in Warta, a prominent Polish insurance company, to Belgian bank KBC for nearly €100m.

Kulczyk also dumped his stake in Poland’s state-owned petrochemical giant PKN Orlen and a considerable share in Polish telecommunications company Telekom Polska. He was fortunate to get out of PKN Orlen at a time when the petrochemical firm found itself in the midst of a massive corruption scandal that prompted both police and parliamentary inquiries.

Currently Kulczyk owns a 28% share in Poland’s second-largest brewery. There has been talk recently that his fortunes could change, however, as his marriage is said to be on the rocks. An impending divorce could see his fortune diminish following a division of assets.

UKRAINE
DMYTRO FIRTASH & KONSTANTIN ZHEVAGO

While much has been written on oligarchs such as Renat Akhmetov, CEO of Systems Capital Management, and Viktor Pinchuk, president of Interpipe, entrepreneurs such as Dmytro Firtash (40, pictured below) have escaped the limelight.

Firtash went from being a firefighter in his native Chernivtsi to acquiring a fortune in the food processing and automobile sales sectors worth €1bn by some estimates and as much as €2.1bn according to others. He avoided media attention until April 2006, when he publicly admitted to having a 50% stake in RosUkrEnergo, a mysterious joint venture between himself, his business partner Ivan Fursin and Russia’s Gazprom (holding the other 50%), which imports natural gas from Turkmenistan to Ukraine and western Europe via Russia.

RosUkrEnergo was at the heart of a political scandal in mid-2005 that eventually resulted in the dismissal of Ukraine’s government, then headed by Yulia Tymoshenko, by Ukrainian president Viktor Yushchenko. Tymoshenko and her supporters questioned the legality of having a non-transparent intermediary import the country’s critical gas supplies for a sizeable fee.

Fellow Ukrainian businessman Konstantin Zhevago (32) is considered to be a genius. In 1993, at the modest age of 19, he became the CFO of Finance & Credit, a sizeable local bank. “Little Kostya”, as his peers and colleagues refer to him, has subsequently expanded his business activities to include Poltava Ore Mining and domestic truck maker AvtoKraz. The diminutive Zhevago has announced plans to pump €1.5bn into the construction of state-of-the-art metal-lurgical plants in Ukraine and neighbouring Hungary. It is estimated that his personal fortune is worth €1.4bn.

Zhevago has also taken the lead set by other Ukrainian entrepreneurs and entered the world of politics; in the 1990s he secured a seat in the Verkhovna Rada, Ukraine’s single-chamber parliament. There he quickly gained a reputation for opportunism and has switched allegiance from one political party to the next at the drop of a hat. He is known for attaching himself to politicians who are either in power or soon will be. Currently he is a member of the Bloc of Yulia Tymoshenko, but considering the fact that Tymoshenko and her party members have been forced to take seats in the opposition, how long this allegiance will last is anybody’s guess.