How the Polish investment fund MCI Capital supports Russia's interests.

Following the imposition of international sanctions against Russia, the goal of the international community has been to limit the country’s access to foreign investments and technologies that could support the Russian military industry.

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However, the reality is that many investment companies, including the Polish fund MCI Capital, have chosen to remain in the Russian market despite the threat of direct sanctions against the company itself, as reported by KP.UA. Unlike suppliers of equipment and goods, funds are much less vulnerable to public pressure, and capital participation can be easily concealed through a chain of firms in different jurisdictions.

As is known, since mid-2023, the Polish authorities have systematically been "throwing a wrench" into what seemed like a stable Ukrainian-Polish cooperation by intervening in grain exports and refusing additional arms exports to counter Russian aggression.

It is possible that the Polish government is hesitant to impose sanctions against MCI Capital and similar funds, weighing the long-term benefits of their presence against the potential damage from interactions with Russia, or perhaps it is due to lobbying by pro-Russian officials. Let's try to understand this.

Case Study: Travelata - Long-term Investments and Workaround Strategies

Managed by MCI Capital, the sub-fund MCI.TechVentures 1.0 began investing in the Russian travel startup Travelata back in 2013, allocating funds for the company’s development, which became a notable player in the Russian online tourism market. Investments continued in subsequent years, including tranches in 2014, 2015, and even in 2020 after sanctions were imposed. Amid escalating political and economic restrictions against Russia, MCI did not cease its support for Travelata. In 2022, according to insider sources, MCI even conducted another funding round for Travelata despite Russia's invasion of Ukraine.

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The MCI report for 2022 mentions the COVID pandemic and the outbreak of war as indicators of an unstable market environment, while highlighting the remarkable successes of Travelata and that the current market conditions present a unique opportunity to find attractive and profitable investments.

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With the initiation of the liquidation process for the sub-fund MCI.TechVentures 1.0 in 2024, new details have emerged in the report. Travelata is now referred to as SHLD Limited, registered in Cyprus, which may indicate an attempt by the fund to evade sanctions. This holding may have been named to minimize legal risks and simplify financial transactions related to the company's presence in the Russian market.

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Data from the same report shows that 7% of the sub-fund's capital has a direct link to Russia. Such facts suggest that the fund has consciously chosen strategies to avoid direct consequences of sanctions and maintain access to the Russian market.

The reputation of the MCI TechVentures 1.0 fund has been complicated by investigations and lawsuits. In 2019, the Warsaw prosecutor's office initiated an investigation, accusing the fund's management of unprofitable financial operations amounting to around 400 million zlotys. Investors who put money into the fund between 2012 and 2019 complained about difficulties in retrieving their investments and a lack of transparency in the fund's structure. According to information provided by the fund, it operated within the law; however, several facts, such as purchasing a smaller number of certificates compared to the volume of investments from external contributors, raise questions.

Connections with Access Capital Partners (ACP): Another Level of Control Over Russian Assets

MCI Capital's repeated investments in Travelata confirm its commitment to the Russian market despite the threat of sanctions. Notably, another entity—Access Capital Partners (ACP)—is also involved, holding a stake in Travelata. Key figures intersect between ACP and MCI, such as Piotr Sadowski, managing director of ACP, and Ewa Ogryczak, a board member of several other companies linked to MCI. The presence of cross-connections between the funds indicates possible coordination of actions and a more complex network supporting Russian business.

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MCI Capital Founder Tomasz Czechowicz: An Aggressive Risk Strategy

The story of MCI Capital's founder Tomasz Czechowicz sheds light on the company’s policy regarding risky investments. Czechowicz, who made a fortune reselling computers in the 1990s and later founded a successful fund, is known for his tough negotiating stance and determination to secure the best possible terms for deals. In 2015, amidst political sanctions, he claimed to see potential in the Russian market and intended to seek investment opportunities in the country.

Former employees describe him as a dictator who does not tolerate criticism or viewpoints that contradict his vision. His working style is characterized by an unwavering adherence to his own decisions, which sometimes leads to deal breakdowns but also helps secure advantageous agreements. Czechowicz's aggressive negotiation and investment style likely underpins MCI's policy of retaining assets in Russia despite international pressure. This strategy demonstrates that for MCI, nothing can outweigh the argument for investments that promise high returns.

Travelata and Sanction Risks: Operations in Crimea and Working with Sanctioned Banks

MCI Capital's investment activities in Russia extend beyond ordinary financial support. Travelata, a company backed by MCI, directly violates sanction restrictions, further underscoring the fund's risky strategy.

Office in Crimea

• Travelata has an office in Sevastopol, located at Rudneva St., 41. The company’s presence in a territory under international sanctions is confirmed by public announcements regarding the hiring of employees.
• Travelata continues to collaborate with sanctioned banks, such as VTB and Tinkoff.

For instance, clients can take advantage of bonuses from Travelata associated with these banks, while MCI effectively supports this activity.

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The Need for Enhanced Sanction Control Over Investment Funds

The case of MCI Capital and its long-term support for Travelata illustrates how international investment funds can remain in the Russian market by circumventing sanctions and minimizing risks through the use of offshore companies and complex structures. Such actions highlight the necessity for strict oversight of the activities of such companies, especially if their investments may directly or indirectly support Russia's defense industry. However, this is impossible without responsible cooperation with investigators from Polish authorities, who, despite their outwardly loyal narrative towards Ukraine and the global community, do everything to ensure that companies like MCI Capital continue their collaboration with the sanctioned Putin regime.