OREANDA-NEWS. November 11, 2008. Following the statement of Mr Terekhin in the interview given to Ukrainskaya Pravda online edition on 4 November, 2008, SCM regards as necessary to declare the following, reported the press-centre of SCM.

1. The information about the transfer of US5bn by the controlling shareholder of SCM Rinat Akhmetov from Ukraine is false and based on fiction and lack of understanding of basic economic processes. SCM did not transfer these funds abroad either in 2007 or in 2008. Ukraine remains the primary focus of our investment.

In early 2006, SCM launched a corporate restructuring program. SCM has been consistently realizing this program for almost three years in full compliance with the legislation, regardless the actual political situation, composition of the government and other executive authorities.

In the course of its implementation, we (SCM) created industrial subsidiary holdings – that fully (100%) belong to SCM Group –  pursuing the goal to set up an ownership structure that would be clear and transparent both for Ukrainian and international audiences, firstly for international investors. During 2006 – 2007 SCM transferred shares of Group's enterprises to these companies according to their industry of operation.

The shares were handed over at market price and in strict compliance with the current law, including the tax code. Specifically, the shares of metal enterprises of the Group were transferred at market price from SCM to its subsidiary Metinvest. The market value of the shares at the time of the handover made US5bn.

The transfer of securities DID NOT result:
either in physical relocation of the assets or changes in their legal address
Almost the whole business of SCM was and remains in Ukraine. Ukraine is our first priority, and Ukrainian economy is the top focus of our investment.

or in changes of the ultimate beneficial owner. The ultimate beneficial owner is, as before, SCM and its shareholders - residents of Ukraine.

or in changes of the place, where the shareholders register is kept. According to the current Law, all registrars of our enterprises are licensed Ukrainian companies.

or in a change of tax payment place or the tax policy of the Group. All our businesses are responsible taxpayers, pay their taxes in Ukraine in full and on time, work according to direct contracts and have no economic relations with their corporate centres. Only in 2007, SCM paid UAH 1.9bn of income tax - 8.5% more than in 2006. Total tax payments of SCM Group in 2007 exceeded UAH 6bn. 

or in taking financial resources of the Group out of Ukraine.
We underline again that 5bn is the estimated value of shares, not money.

2. Being the biggest national investor, SCM believes that such statements made by a government official destroy the investment climate of Ukraine.

SCM and all our businesses are consistently realizing an own investment program aimed to improve efficiency of the companies in the long-term. On average, SCM Group invests over US1bn every year. We continue realizing this program even amid the crisis in the global market and have focused on the already-launched projects.

We believe that the government must support business not through providing direct help to individual producers, but by: improving the financial system and restoring trust to it; restoring the political and economic stability; developing domestic consumption market; and forgoing irresponsible and proofless statements made for the sake of momentary political environment and to please the interests of individual politicians and parties.

SCM is convinced that such irresponsible and groundless statements of individual officials and lawmakers, whatever reasons they are made for, affect reputation of the whole country and Ukrainian business, as well as deteriorate the investment climate and lead to further reduction of investment in the economy of Ukraine.

Rinat Akhmetov has transferred the management of his business to System Capital Management, of which he is the controlling shareholder. For this reason, SCM is entitled to evaluate all public statements made about activities of the business owned by Mr Akhmetov.

ZAO System Capital Management - the biggest managing company of Ukraine, 90% of which belongs to Rinat Akhmetov – considers as necessary to state that incorrect information of this kind badly damages its business reputation and reputation of its Shareholder.

This statement of the company has been published in online version of Ekonomicheskaya Pravda: http://www.epravda.com.ua/publications/49144c7976844/