A major row is brewing in the investment market. The reason is that one of the major venture capital funds of Ukraine affiliated with Vitalii Khomutynnik being suspected of fraud and deception of investors. We are talking about GR Capital, a venture fund, which was among the top 10 funds in Ukraine (according to 2021 data) with a portfolio volume of $168 million.
Several investors of the GR Capital fund have noticed a number of red flags related to the fund. First, the fund has stopped providing annual audited statements and information about its net asset values to clients. Secondly, instead of open general communication with investors, the fund’s management decided to switch to personal communication with each individual (such practice is common when a company does not want to bring serious issues to the public eye). Thirdly, it was the GR Capital’s starting use of different reports and figures for new investors and for regular clients that really alarmed investors. As market analysts say, the practice of overstating key fund indicators for new clients is a clear sign that the fund is trying to attract additional funds by any means to “conceal” the issues that have arisen.
The fund’s recent problems could have arisen for many reasons: Vitalii Khomutynnik became a target of a number of investigations (“Monaco Battalion”, Ukrainska Pravda, etc.). In 2022, his offices were searched, and for international financial institutions, this is a very clear signal that the client and related companies are “toxic”. With such “baggage” you can hardly expect that European partners will continue to do business with you.
In general, while Vitalii Khomutynnik is trying to solve a number of serious problems with the law from Monaco, the problems related to his venture fund are gathering like a snowball. And if we take into account that in the near future Khomutynnik may fall under sanctions (not only in Ukraine), then investors really have something to worry about …