Boris Lozhkin

Borys Lozhkin
Борис Ложкін
Lozhkin in March 2011
Head of the Presidential Administration of Ukraine
Personal details
Born	(1971-10-23) October 23, 1971 Kharkiv, Ukrainian SSR, Soviet Union
Nationality	Ukrainian
Spouse(s)	Nadezhda Shalomova
Children	Anastasia (b. 1994)

Borys Yevhenovych Lozhkin (Ukrainian: Борис Євгенович Ложкін; born on October 23, 1971 in Kharkiv, Ukrainian Soviet Socialist Republic) is the head of the Presidential Administration of Ukraine,^[1] the Chairman of the Board and President of UMH group,^[2] a multimillionaire, and a media manager. He ranks among the top-30 of the most influential media managers in the CIS countries (according to RBK^[3] and is a member of the board of WAN-IFRA.^[4]

Early life

Lozhkin was born on October 23, 1971 in Kharkiv (Ukraine, former USSR country).^[5][6] In 1985 (at the age of 14) concurrently with education started journalistic career as a string correspondent in "Leninskaya smena" and “Vecherniy Kharkov” newspapers. In 1989 he launched his own entrepreneurial activity by creating in Kharkiv of a newspapers and magazines sales network. In a year, he invested his first significant capital into the commercial newspaper "ATV", became its publisher and editor-in-chief.^[6]

Business activity

Boris Lozhkin and Petro Poroshenko

Boris Lozhkin in the Verkhovna Rada

In the spring of 1994, Lozhkin gathered editorial stuff and started preparations for the publishing of "Telenedelya" newspaper, its first edition was issued in Kharkov on October 27, 1994. The publication became the first TV-guide newspaper in Ukraine. Currently celebrity magazine "Telenedelya" ranks among TOP-10 major printed media brands in ex-Soviet space^[7] (#1 in Ukraine, No. 6 in Russia in terms of sales ratings) with an audience of 5.2 million readers.

Public award "TV star" established by "Telenedelya" magazine is the first and only nationwide public rating of TV products and TV person where winners are elected by means of viewers' voting. In 2000, the year when Lozhkin founded UMH group, aggregate circulation of his publications reached almost 58 million copies. Currently the media holding is Ukraine's major publishing company, aggregate circulation of its publications constitutes over 115 million copies. In November 2003 UMH entered Russian market: Boris Lozhkin founded “Populyarnaya pressa” (“Popular press”) publishing house. In a couple of years UMH built one of the broadest regional networks that embraced 30 cities.

In 2006 Lozhkin created ”Tvoya pressa” (“Your press”) company that later became Ukraine’s major periodicals and associated goods sales network. In 2008 UMH Group under the auspices of Boris Lozhkin was the first Ukrainian media company to carry out private stocks placement on Frankfurt Stock Exchange gaining 45 million US Dollars against 15% of stocks and achieving capitalization of $300 million.^[8] Since the first radio station was launched in 2001, UMH Group became one of the largest holdings in Ukrainian radio market with daily audience of 3 million persons. In the second half of the millennium's first decade Internet became an important activity area of the UMH Group. In terms of audience and commercial revenue the group is the No. 1 player in Ukraine.

Currently the resources cover around 50% of Ukraine's Internet users with the group's share in the market for Internet commercials constitutes 29%. In terms of reach UMH Group ranks among TOP-5 companies that operate in Ukrainian market, the list also includes such international corporations as Google, Mail.Ru and Yandex. UMH portfolio of web projects accounts for about 20 popular resources including such high end projects as Korrespondent.net, bigmir.net, i.ua, football.ua.^[9] In 2010 the president of UMH Group Boris Lozhkin concluded agreements with Forbes Media that allowed UMH Group to develop in Ukraine projects under Forbes trademark. First edition of Forbes Ukraine magazine was published in March 2011^[10] and Forbes.ua web site was launched in September 2012. Miguel Forbes admitted that Ukrainian Forbes ranks among company's TOP-5 license projects.

In 2011, Lozhkin concluded a strategic agreement with Conde Nast publishing house that stipulated launching in Ukraine of Vogue, GQ, CN Traveller and other projects. Vogue magazine has been published since March 2013.^[11] In April 2011 Boris Lozhkin in partnership with Petro Poroshenko purchased KP Media holding from Jed Sunden,^[12] its portfolio included such market leaders in respective segments as “Korrespondent" magazine, news resource korrespondent.net and information portal bigmir.net.

As of September 2013, UMH Group controls the portfolio of over 50 brands with leading positions in Internet, radio and press markets in Ukraine and ranking among TOP-10 Russia's publishing market players.^[13] According to "RBK.Ratings" the media holding ranks among TOP-15 major media companies within former Soviet area.^[14][15]

UMH Group sales deal

In June 2013, Lozhkin announced the sale of 98% of the UMH Group's shares to the VETEK group of companies.^[16] Expert estimated the transaction value at $450–500 million. According to Forbes Ukraine estimations, the sale of UMH Group ranked among the top 10 largest M&A deals of the first semester of 2013 with an estimated value of the transaction constituting $410 million and EV/EBITDA multiplier constituting 13.7.^[17] Until the deal is closed, all UMH stocks belong to former shareholders and remain on escrow account of a British legal company.

During 2012, Lozhkin sought investments to develop the company. Having explored world stock market situation, he suggested that UMH Group board of directors work with private investments. Ultimately, having looked into a number of different offers, UMH Group shareholders opted for the VETEK group offer since it allows attraction of additional resources for more intensive development of the company.

The transaction to be completed in March 2014, but in early November 2013th Boris Lozhkin announced the early closing of the transaction on the sale of the company VETEK 99.9% of UMH group. All financial obligations to the transaction have been fully implemented.^[18] According to Boris Lozhkin, UMH group's shareholders and partners are satisfied with the deal."

Commenting on future plans, Lozhkin said, "I would very much like to build a company maybe even larger than UMH. As to mass media, it will be a hard task to accomplish due to small market size, but it is a practicable aim for a company that operates, for instance, in electronic commerce."^[19]

Public activity

In 2003, Lozhkin became a member of the Council of Entrepreneurs under the Cabinet of Ministers of Ukraine board. from 2004 to 2006, he was the President of the Ukrainian Association of Press Publishers. In 2006, he joined the board of WAN-IFRA in 2006^[4] and became a member of the Federation of Media Industry Employers of Ukraine Presidium in 2012.

In 2012, Lozhkin initiated and organized the World Newspaper Congress WAN-IFRA in Kiev.^[20] In 2013, he delivered a speech during the WAN-IFRA Congress in Bangkok as the only speaker representing former members of the Soviet Union.^[21]

Awards and accomplishments

In 2003, Lozhkin won the "Man of the Year" award as the "Entrepreneur of the year" in Ukraine^[22] and ranked among the top-100 most influential Ukrainians according to "Korrespondent" magazine.^[23]

Lozhkin is a Candidate of Philological Sciences. He is a Merited Journalist of Ukraine.^[24]

In 2008, he won the Russian nationwide award "Russia's best media manager" for the "Successful company's open capital market entrance"^[25] In the same year, he won the Ukrainian competition "Entrepreneur of the year," which is a part of Ernst & Young's Entrepreneur of the Year® Awards.

In 2013, Lozhkin was awarded the Diploma of the Federation Council of Russia for a significant contribution to the development of mass media in Ukraine and strengthening good neighbor relations between Russia and Ukraine. The Diploma was presented in Moscow by Valentina Matviyenko.^[26] With a wealth of $126 million, he ranked 101 in Focus magazine's 2013 list of Ukraine's richest people.^[27] In the same year, he ranked in the top 30 of the most influential media managers in the CIS countries.^[3]

Head of the Presidential Administration of Ukraine

Appointment

On June 10, 2012 President of Ukraine Petro Poroshenko appointed Boris Lozhkin Head of the Presidential Administration.^[28]

Lozhkin saw this as an opportunity to apply the management skills he developed as a result of two decades of managing a large and successful company to improve the system of public administration in Ukraine.^[29]

New approach to the state HR policy

During the 2nd half of 2014 the Presidential Administration of Ukraine was hiring private sector managers and foreign state servants with a positive experience of reforms for public service posts.

With the assistance of Boris Lozhkin high qualified top managers such as CEO of Microsoft Ukraine Dmytro Shymkiv (Deputy Head of the Presidential Administration, responsible for reforms) and a partner of a prominent law firm “Vasil Kisil & Partners” Oleksiy Filatov (Deputy Head of the Presidential Administration, responsible for the judicial reform) were appointed to the Presidential Administration in 2014.

In the end of 2014 the Presidential Administration accepted the plan of Lozhkin to appoint professional foreign technocrat managers to positions in government and other state institutions. The staff of Cabinet of ministers approved by Verkhovna Rada on December 2, 2014 included: ex- US citizen Natalie Jaresko (Minister of Finance), ex-citizen of Lithuania Aivaras Abromavicius (Minister of Economic Development and Trade) and ex-citizen of Georgia Alexander Kvitashvili (Minister of Healthcare)

The new approach to HR policy introduced by Lozhkin was to “infect” state authority with people with the new mentality, new way of thinking.^[30]

“I consider the experiment with appointments of the foreign managers the strongest and most successful reform of the Presidential Administration. This definitely reanimated state HR policy and the very system of state authority”, says Vladimir Fesenko, political scientist.^[31]

By late 2015 an expression “Reforms special forces” became widely used by Ukrainian journalists. The term describes a team of foreign reformers in Ukrainian state authority invited on the initiative of Boris Lozhkin who were admitted to Ukrainian citizenship. The “Forces” include Natalie Jaresko – the Minister of Finance, Aivaras Abromavicius – Minister of Economic Development and Trade, Gia Getsadze – Deputy Minister of Justice, Gizo Uglava – First Deputy Director of the National Anti-Corruption Bureau of Ukraine, Davit Sakvarelidze – Deputy Prosecutor General, Eka Zguladze – Deputy Minister of Interior. In November 2015 Khatia Dekanoidze joined the team of reformers as the Head of National Police Forces of Ukraine.

Strategic vision and reforms

In June 2014 Boris Lozhkin started coordinating the collaboration of Presidential Administration staff and experts developing a medium-term plan for reforms and development of Ukraine – “The Strategy for Sustainable Development of Ukraine “Ukraine-2020”.^[32] The final plan included 62 reform directions in economic, political and social spheres. Top priorities were 8 reforms and 2 programs. An important peculiarity of the document was the fact that it determined 25 key performance indicators of the country’s development.

On January 12, 2015 the President of Ukraine signed the decree “On the Strategy for Sustainable Development “Ukraine-2020”.^[33] In July 2014 Boris Lozhkin started the process of optimization and increase in work effectiveness of the Presidential Administration staff. As the result the newly hired personnel constituted 40% of marginal staff quantity, managerial staff – 70%. Key performance indicators were developed for every position at the Administration.

After preliminary parliamentary elections that took place on October 26, 2014, Boris Lozhkin coordinated the work on creating the Parliament Coalition Agreement – a key document determining immediate action plan of the Ukrainian authorities. The agreement describes concrete steps to be implemented. 59% of them have execution terms set (in the sphere of economy – 66%).

In late 2014 with the support of the Presidential Administration and participation of private sector and IT business representatives a system of online procurements ProZorro was developed.^[34] It allows to carry out subthreshold procurements of goods under 100 000 UAH in value and services under 1 000 000 UAH. In February 2015 the system started operating in test mode. Apart from Presidential Administration many government institutions implement the system (e.g. Ministry of Justice, Ministry of Agriculture, Enegroatom et c.). In April 2015 the National Reform Council obliged all of the state institutions to use ProZorro in subthreshold procurements.^[35]

In 2014 – early 2015 Boris Lozhkin was supervising the process of legislative deprivation the Prosecution Service of general oversight function and creation of the National Anti-Corruption Bureau. At the same time, he coordinated establishing and functioning of the Judicial Reform Council. Initiatives of the Council were approved by Verkhovna Rada which led to adoption of the Law “On Fair Trial” and adoption of the amendments to Constitution concerning revision of the issue of immunity of judges in the first reading.

On June 3, 2015 President of Ukraine Petro Poroshenko appointed Boris Lozhkin Deputy Head of the National Reforms Council.

Family

Lozhkin is married to Nadezhda Shalomova. Their daughter, Anastasia, was born in 1994.^[5]

References