UKRAINE: RICHEST EXPATS, MOHAMMAD ZAHOOR #1
Owner of ISTIL GROUP, includes Kyiv Post, hotels, media, office buildings
Kyiv Post, Kyiv, Ukraine, Friday, October 8, 2010
KYIV - While it may look strange and self-serving for the Kyiv Post to declare its publisher the richest foreigner in Ukraine, Mohammad Zahoor certainly appears to have earned the title. If anyone knows of another expatriate worth between $500 million and $1 billion, the estimated size of Zahoor’s fortune, please let us know and we will set the record straight.
Zahoor certainly didn’t get where he is today – namely, wealthy – by owning the Kyiv Post. Zahoor punched his ticket the hard way: making steel in rough-and-tumble Donetsk. He came to Ukraine in 1974 as a student from Pakistan, the start of his pioneering expatriate career.
He learned Russian and metallurgy well. Then he eventually found a way to apply those skills in Ukraine, one of the world’s top 10 steel-exporting nations.
Zahoor also displayed a talent for knowing when to get out of a business, as he did in 2008 by selling his Donetsk steel mill for a top-drawer price of $1 billion.
Zahoor is now the chairman and owner of the ISTIL Group, which went on an asset-buying spree in the last two years, including the small (for him) purchase of the Kyiv Post in 2009 for $1.1 million from its founder, American Jed Sunden.
Zahoor left Karachi, Pakistan, to study metallurgy in Donetsk in 1974. He worked in Pakistan after graduating, but made Ukraine his home after working in Moscow, making frequent business trips to secure metals contracts. At that time, Zahoor and a Thai businessman were running Metalsrussia, a Hong Kong-registered trading company based in Moscow.
It soon became the main trader of Russia’s Cherepovets metallurgy factory. The business was going well and Zahoor didn’t think of moving to Ukraine until 1993, when Thailand imposed an anti-dumping duty on Russian rolled metal.
He soon became heavily invested in Ukraine.
Zahoor, a British citizen, renamed the company as the ISTIL Group in 1991 and made it a diversified holding company, with such interests as Aleana, a plastics manufacturer.
But his main line of business was metals. He helped steel mills in several nations improve their product and learn how to transport the finished material to its destination without damage. “It was luck, of course, being at the right place at the right time, and my strong knowledge of the market,” he said.
He learned his first tough lesson about mixing business with politics during the 1994 presidential campaign. Incumbent President Leonid Kravchuk’s advisers had asked Zahoor to speak on Kravchuk’s behalf as a major investor. His speech was broadcast on TV and was a success.
But a few months later, Kravchuk’s rival, Leonid Kuchma, won the presidency. “We had serious problems,” Zahoor recalled. The pressure from the government had not eased up even by 1996, when he decided to invest into a dying Donetsk Metallurgical Plant. Since then, Zahoor decided to never lend his public support to any Ukrainian politicians.
“These two [media and real estate] are our main fields of interest. Real estate is doing really bad now, but it’s a good time to buy.”
Competitors muscled him out of a big steel mill in 2000, but Zahoor found a way to modernize the mini-steel mill left in his control and prosper before cashing out in 2008.
Today, the ISTIL Group of companies employs up to 1,000 people. The owner has turned most of his attention to building up a portfolio of Ukrainian media and real estate assets. “These two [media and real estate] are our main fields of interest,” he said. “Real estate is doing really bad now, but it’s a good time to buy.”
He purchased the landmark Leipzig Hotel near the Golden Gate in the heart of Kyiv’s center. The five-story, 9,620 square-meter building is an architectural gem that has sat empty for more than a decade.
He invested in Rialto Business Center in Podil, not far from the Petrivka metro stop. Reconstruction is under way in the 15,000 square-meter building, which will feature the latest digital fiber optic communications technologies and the latest in energy-efficient heating and cooling. He also bought the old Kinopanorama movie theater and owns ISTIL Studios, a state-of-the-art film and television production center, among other new assets.
He is the husband of singer-actress Kamaliya.