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Ukraine's 'Home Depot' Reborn In Russian-Occupied Donetsk Despite Ban


An Epitsentr K (left) hypermarket and the Galaktika one that replaced it
An Epitsentr K (left) hypermarket and the Galaktika one that replaced it

Shopping-center colossus Epitsentr K, a major corporate donor to the Ukrainian armed forces owned by a billionaire couple who are ranked among the country's richest people, maintained connections to its business in the Russian-occupied part of Donetsk region after the full-scale invasion in 2022, an RFE/RL investigation has revealed.

The finding by Schemes, the investigative unit of RFE/RL's Ukrainian Service, suggests that, in the midst of the Russian onslaught, members of Ukraine's business elite can find ways to protect their investments in areas of the country now under Russian control -- sometimes in violation of the law.

For Epitsentr K, that opportunity came via its former Donetsk regional manager, who has since sided with Russia in its war against Ukraine. Epitsentr K's payments to this ex-manager, first reported by Schemes on October 17, mark the second time the company, which promotes itself as Ukraine's largest shopping-center chain, has been linked to a business in Russian-occupied Ukrainian territory.

Earlier investigations by Schemes and RFE/RL's Crimea.Realities showed that Epitsentr K's owners, Oleksandr and Halyna Hereha, also own a chain of Epitsentr-style hypermarkets on the Russian-controlled Crimean Peninsula.

To date, though these activities contradict Ukrainian law on Russian-occupied territories, Ukrainian state prosecutors have not raised further inquiries.

'Family And National Values'

With 74 locations nationwide and tens of thousands of employees, Epitsentr K, described by one Ukrainian business news site as "Ukraine's version of Home Depot," can seem like an omnipresent feature of daily life. Based on the French home-improvement retailer Castorama, Epitsentr K started in 2003 with DIY home improvement, but its shopping centers now include subsidiary stores with everything from children's toys and plants to electronics and car parts.

A special Ukrainian customs center exists just to process goods for the Epitsentr K network, which exports grain and ceramics via affiliates Epitsentr Agro and Epitsentr Ceramic Corporation, according to the company's website.

In 2022, despite the war, Epitsentr K had a profit of over 21 billion hryvnyas ($644 million) according to corporate data monitor YouControl.

Building materials at a NovaSentr K hypermarket in Sevastopol, Russian-occupied Crimea, in 2022
Building materials at a NovaSentr K hypermarket in Sevastopol, Russian-occupied Crimea, in 2022

A corporate history on the Epitsentr K website states that the Herehas built this "successful and powerful" business "on the reliable foundation of family and national values."

In 2022, Forbes Ukraine ranked the couple, shown wearing traditional Ukrainian embroidered shirts, as the country's sixth-wealthiest citizens, worth an estimated $1.2 billion.

Politics is part of that profile, too: Oleksandr Hereha, 56, has been a member of parliament from his native Khmelnytskiy region in western Ukraine since 2012. Halyna Hereha, 64, formerly served as Kyiv's acting mayor, deputy mayor, and secretary of its city council.

Since the start of Russia's full-scale invasion in February 2022, the two have made support for the Ukrainian military a central focus of Epitsentr K's public image.

The company has pledged to provide $1 million for demining vehicles, a priority for Kyiv as its armed forces struggle to regain control of heavily mined, Russian-occupied areas of eastern and southern Ukraine.

WATCH: RFE/RL correspondent Maryan Kushnir traveled with a Ukrainian demining team as they tried to clear roads in territory retaken from Russian forces near Bakhmut in Ukraine's Donetsk region.

Ukrainian Sappers Say It May Take 30 Years To Demine Lands Around Bakhmut
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Epitsentr K has co-donated 65 ambulances to the military -- reportedly in response to first lady Olena Zelenska's appeal -- and handed over 76 of its own vehicles. It also has provided humanitarian support for the families of slain Ukrainian soldiers and persons displaced by the conflict.

In May 2023, the military awarded the company's director of operations, Maksym Sheremet, a Cross of Civic Merit as a "sincere thank you" for Epitsentr K's assistance.

Promotional text on the company's website assures government-financed institutions that Epitsentr K will deliver its goods to any part of Ukraine "except the occupied territories."

But Ukrainian tax documents obtained by Schemes indicate that, contrary to these statements, business in the Russian-occupied portion the Donetsk region has made up part of Epitsentr K's portfolio.

Donetsk Double

In January 2015, nine months after the war between Ukraine and Russian-backed separatist forces erupted in the Donbas, Epitsentr K announced it was closing its five retail outlets in areas of the Donetsk and Luhansk regions outside of government control. The Ukrainian news site LB.ua cited the company as saying that its three Donetsk-region operations would sell off all their remaining goods.

Roughly five months after Epitsentr officially closed its Donetsk outlets, a retailer called Galaktika (Galaxy) was registered at the same address as Epitsenter K's shuttered shopping center in the Donetsk region city of Makiyivka.

The Herehas do not directly own Galaktika, according to Russia's Unified State Registry of Legal Entities. But the firm, owned by the Russian wholesaler Donstroi, uses the same branding, decor, color scheme, promotions, and department names as Epitsentr -- visual similarities that prompted the new Schemes investigation.

Galaktika did not change the names of the departments; for example, it kept both the name and the color scheme of the previous Garden Center department.
Galaktika did not change the names of the departments; for example, it kept both the name and the color scheme of the previous Garden Center department.

The two firms also share largely the same training manual. A Russian-language copy posted on the document-sharing site Scribd reads in large part like a direct translation from Epitsentr K's Ukrainian-language original, apart from references to the "Donetsk People's Republic," the name Russia uses for the Donetsk region.

A comparison of the "Galaktika Shopping Center Intern Folder" and the "Epicenter Intern Guide"
A comparison of the "Galaktika Shopping Center Intern Folder" and the "Epicenter Intern Guide"

One senior manager features in both manuals: Hennadiy Halchuk, a former Epitsentr K acting director who appeared with the Herehas in a promotional photo for the shopping center's 2012 opening in the Donetsk region city of Horlivka.

Oleksandr and Halyna Hereha (highlighted, right) join Hennadiy Halchuk onstage in Horlivka in 2012.
Oleksandr and Halyna Hereha (highlighted, right) join Hennadiy Halchuk onstage in Horlivka in 2012.

As Galaktika's general director, Halchuk, who stayed in the Donetsk region after the war fomented by Moscow broke out in 2014, ensured that the store secured the support of Russian-backed officials, even while receiving a monthly salary from Epitsentr K.

In 2019, together with the industry minister and social policy minister of the Russian-back separatist group DNR, Halchuk (right) solemnly opened the second Galaktika hypermarket in Donetsk.
In 2019, together with the industry minister and social policy minister of the Russian-back separatist group DNR, Halchuk (right) solemnly opened the second Galaktika hypermarket in Donetsk.

Among other measures, Galaktika, under Halchuk's management, donated a vehicle to the Russian-backed emergency response agency in 2020 and hosted firefighting training in 2018. The firm regularly commemorates Russian state holidays on its Instagram account.

It also has expanded, opening a store in October 2022 with household and DIY construction supplies in Mariupol, a Donetsk region city that was largely destroyed and seized by Russia earlier that year after a long and deadly siege.

Halchuk himself, who now sits on the Russian-imposed city council in occupied Makiyivka, is a member of Russia's ruling party, United Russia, and an outspoken supporter of Russian President Vladimir Putin.

Halchuk also heads the local lobbying organization Delovaya Rossiya, or Business Russia. In August, the Russian-imposed leader in the occupied part of the Donetsk region, Denis Pushilin, appointed him to the occupied area's so-called Investment Committee.

Aside from his past involvement with Galaktika, Halchuk owns a retail company, Namestnik, that also is headquartered at Epitsentr K's former Makiyivka location.

He gives no public sign of connection with Epitsentr K. In a June 2023 video on Instagram, he termed Ukraine "the enemy."

Yet, for most of the past 10 years, the Ukrainian company Epitsentr K paid him wages.

According to information from Ukraine's State Tax Service that two independent sources provided to Schemes, Epitsentr K paid Halchuk a full-time monthly salary from September 2013, when the shopping center still operated under its own name in the Donetsk region, until July 2022. The payments totaled nearly 1.5 million hryvnyas ($41,000).

In 2015 and 2016, the Epitsentr-K-owned hypermarket Nova Liniya 1 also paid Halchuk a monthly salary of 85,000 hryvnyas ($2,300).

In 2016, though cooperating with the anti-Kyiv forces in Donetsk, he donated 1,000 hryvnyas (about $45 at the time) to a pro-Western Ukrainian political party founded by the Herehas, Za Konkretni Spravi, according to campaign finance documents from the National Agency on Corruption Prevention.

Furthermore, data obtained by Schemes from former Ukrainian government checkpoints at Novotroyitske and Maryinka in the Donetsk region shows that Halchuk visited Kyiv-controlled territory at least 15 times in 2018-19; in 2019, he made the trip monthly.

The exact purpose of these trips is unknown.

Halchuk did not respond to Schemes's questions about his relationship with Epitsentr K.

Responses And Repercussions

Under Ukrainian law, employing individuals in Russian-occupied territory who do not have a registered tax address in Ukrainian-controlled territory or who collaborate with "illegal authorities" in occupied areas can constitute criminal offenses punishable by prison terms, fines, and a ban on holding "certain positions," the Ukrainian legal journal Yurydichna Hazeta warned in May.

Within the past year, two prominent businessmen have been detained for alleged business activities on Russian-occupied territory or with the Russian military: Parliamentary deputy Oleksandr Ponomaryov has been accused of treason and aviation engine pioneer Vyacheslav Bohuslayev is under investigation on suspicion of collaboration.

Halyna Hereha in 2012
Halyna Hereha in 2012

Schemes asked Hereha, a former member of the banned, Moscow-friendly Party of Regions, why he had continued to pay the Donetsk-based Halchuk a salary after Russian troops took over the region in 2022. Schemes reporters also asked whether he had continued his business in separatist-held and now Russian-controlled areas of the Donetsk region since 2014.

Hereha, who has been under Russian sanctions since 2018, did not respond.

Schemes editors also addressed their questions to Epitsentr K's headquarters. As of the time of publication of this article, the company had not replied.

Ukrainian prosecutors have made no further inquiries.

A Copy In Crimea

But the Donetsk story follows a familiar pattern: Russian-occupied Crimea has an Epitsentr-K-lookalike retail network, too.

In April 2014, shortly after the Russian invasion of Crimea, a Novatsentr K, run by Epitsentr K's former Crimea director, opened on the site of Epitsentr K's closed store in the Crimean city of Simferopol. Novatsentr K's personnel department told Schemes that the store was the Ukrainian Epitsentr K, reregistered -- a violation of Ukrainian law, which does not recognize the authority of Crimea's Russian occupation regime.

Construction of a Novatsentr K hypermarket in Sevastopol, Russian-occupied Crimea, in 2019
Construction of a Novatsentr K hypermarket in Sevastopol, Russian-occupied Crimea, in 2019

Tax inspection and Russian registry documents later proved the connection between the two stores, Schemes found.

The Pandora Papers leak of international documents about offshore holdings showed that the Herehas owned the property through two Cyprus-registered offshore firms, RFE/RL's Crimea.Realities revealed in 2021.

Both Epitsentr and Oleksandr Hereha categorically deny any connection to Novatsentr K or to the offshore firms that own it, however.

To date, Ukrainian prosecutors have not investigated Epitsentr K's apparent links to either the Crimean or the Donetsk region retailers.

Written by Elizabeth Owen based primarily on reporting by Maksym Savchuk of Schemes
  • 16x9 Image

    Maksym Savchuk

    Maksym Savchuk is a correspondent for Schemes, the investigative unit of RFE/RL's Ukrainian Service, based in Kyiv. He is the author of 1937, a book about the political and business activities of Viktor Medvedchuk after the Revolution of Dignity. He was born in the village of Baryshivka in the Kyiv region. He graduated as an engineer at the National Transport University and a philologist at the National Pedagogical University. He worked at the Svydomo bureau of journalistic investigations, in the newspaper Ukraine Moloda, and in the investigative journalistic program Exclamation Mark on the TV channel TVi.

  • 16x9 Image

    Schemes

    Schemes (Skhemy) is an award-winning investigative news project run by RFE/RL's Ukrainian Service that focuses on exposing high-level corruption. It was created in the wake of the 2014 Maidan Revolution.

RFE/RL has been declared an "undesirable organization" by the Russian government.

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