It was a remarkable deal by any measure. An oligarch who had come from nowhere, aged just 28, had raised half a billion dollars to buy the media group that had earlier investigated him.

Serhiy Kurchenko, the "gas wizard of Ukraine", had been named publicly for the first time only a year before. Now, he was able to seize the magazine that had investigated him, Forbes Ukraine. Staff resigned en masse. No longer would they write about his irregular business practices.

That's what he thought. But Kurchenko could not have known that within months he would flee to Russia, where he would have to watch his prized purchase picked apart by prosecutors intent on seizing his assets and proving they were stolen.

To make matters worse, Forbes in the United States launched legal action to get its title back. It remains tight-lipped about its executive's embarrassing approval of the 2013 deal and his advisory role.

For the sellers of United Media Holdings (UMH), the cash could not have come at a better time. Boris Lozhkin, who had set out as a journalist in the eastern Ukrainian city of Kharkiv in the 1990s, now counted himself among the country's richest and most powerful men. He walked away with hundreds of millions from the sale.

His business partner and friend, the billionaire "chocolate king", Petro Poroshenko, would go on to become president of Ukraine in June 2014 and make Lozhkin his chief of staff and later, his chief economic adviser.

Dirty money

But the sale of UMH was tainted by dirty money and its residue will still not wash away.

First came the EuroMaidan revolution, which swept away the then president, Viktor Yanukovych, amid evidence that he and his clan had siphoned billions from the Ukrainian treasury. Then came an intensive drive to pick apart their offshore web of financial holdings. Soon, it became clear that Serhiy Kurchenko sat at the heart of a "criminal enterprise" that had helped him accumulate major oil and gas holdings and eventually a media empire.

Then in 2015, it was reported that Austrian officials were investigating a $130m transaction related to the UMH sale from a Latvian account to Lozhkin's company Integrity Holdings ltd on suspicion of money laundering. Fortunately for Lozhkin, they had dropped the case by 2016, saying they had seen no evidence to suggest the money had an illicit origin.

But new information obtained by Al Jazeera's Investigative Unit suggests the money paid was dirty, because it came from a loan secured using stolen money. Campaigners are now calling for deeper investigation in both Ukraine and Austria.

"Ukrainian prosecutors should have strong evidence of the illicit origin of the funds paid by Kurchenko for UMH back in October 2013," said Daria Kaleniuk of Ukraine's Anti-Corruption Action Centre (ANTAC).

They should and in fact they do.

We now know that in order to pay Lozhkin and his partners, Kurchenko secured a loan of $160m from a state bank using what prosecutors have established are stolen assets as security for the loan.

A document released by Al Jazeera last month as part of a wider investigation shows Kurchenko offered the state Import Export Bank of Ukraine security of $50m held in three Cyprus shell companies as well as property belonging to the company he was poised to acquire.

A previously secret Ukrainian court order, released by Al Jazeera in January, shows that the $50m and the three Cyprus companies were part of a wider network of companies dedicated to the embezzlement and laundering of $1.5bn on behalf of the former Yanukovich government.

In December last year, a Kiev court seized the corporate rights of UMH. One of the arguments prosecutors used was that the $160m loan agreement showed "signs of laundering the proceeds of crime."

"Why is there no confiscation of funds from those who - if we are to believe to public court records - received dirty money from Kurchenko for UMH back in 2013?" asks Kaleniuk.

She sees an answer to her own question. "The Prosecutor General of Ukraine will never run against business and political interests of Petro Poroshenko."

Corruption 'a priority'

Ukraine, which is ranked 131 out of 176 nations in Transparency International's Corruption Perception Index, began receiving a $17bn loan from the International Monetary Fund to help it get back on its feet.

The money came with strict conditions that the government build strong institutions that will fight corruption.

With Western support, Poroshenko created a national anti-corruption bureau and appointed a dedicated anti-corruption prosecutor. It was meant to be the beginning of a new era, in which the "oligarchy" – rule by a fabulously rich few – would be taken apart.

That did not happen. The bureau and its allies have faced attacks and have been foiled in their efforts to jail the oligarchs. Poroshenko has stopped short of setting up a specialised anti-corruption court, preferring to rely on the old judges.

In Davos in January, he told an audience that the move remained his priority.

"This is required not for the World Bank, not for the IMF, not for the foreign partners. This is required for me and for Ukraine," he said, adding that this was his "principled position."

Campaigners are not convinced. A recent editorial in the Kyiv Post described Poroshenko as "the king of the corrupt and kleptocratic oligarchy" and "a persecutor of his political foes and anti-corruption activists."

Media empire

Lozhkin grew UMH from a solitary celebrity magazine in Kharkiv into a vast conglomerate controlling numerous newspapers, websites, radio stations and TV channels. It published famous magazines including Vogue and Forbes and employed around 4,000 people.

By 2013, Poroshenko owned a magazine and several other media outlets within it, as well as just under three percent of UMH. He claims he offloaded his various media assets before the deal's announcement in June 2013. However, company documentation suggests that while Poroshenko may have given up his magazines and radio stations, he held onto his UMH shares until the day of the sale in October.

Documents held at the Cyprus company register indicate that he accumulated his shares during 2011 via an offshore company based in the British Virgin Islands (BVI).

He paid around $5m for just under three percent of the company. There is no record that the shares were sold until the day the company finally changed hands in October 2013. So, unless he divested himself of the BVI company beforehand, at the point of sale, Poroshenko stood to receive $15m, tripling his initial investment.

On top of that, journalists have questioned whether the president paid the appropriate tax on the deal, given that it was executed in offshore tax havens, via companies based in the British Virgin Islands.

Multilayered companies and oligarchs

Under Lozhkin, the UMH ownership structure was elaborate. It comprised at least five layers of companies in Ukraine, the Netherlands, Cyprus and the British Virgin Islands (BVI). All the UMH investors used offshore companies to buy shares in a Cyprus holding company called UMH Group Public Limited.

UMH Group Public Limited owned a Dutch company that in turn owned all of the assets in Ukraine. It was owned in turn by a BVI company which was itself owned by another BVI company.

President Poroshenko first bought shares on September 12, 2011, according to documents held at the Cyprus company register. He used a BVI company named Linquist Services Limited. Just over two weeks later, Poroshenko increased his stake by purchasing more shares from another Cyprus company named Torbock Holdings Limited.

That has been linked to oligarchs Gennadiy Bogoyubov and Igor Kolomoisky, the former owners of Ukraine's largest lender PrivatBank. At the time, the three billionaires were friends and business associates, however since PrivatBank was nationalised in late 2016, their relations have soured.

Poroshenko

By late 2012, Poroshenko was holding just under three percent of the company.

Lozhkin's BVI company, which was called Integrity International Holdings, held the bulk of the remaining shares, just over 80 percent. Deutsche Bank Trust in New York held around 12 percent on behalf of other investors, with the remainder belonged to Ukrainian stockbrokers Concorde Capital, and a handful of others.

In early 2013, the local business press reported that Poroshenko had begun selling his media outlets to UMH, including two radio stations in February and another broadcaster and magazine later.

There was no record of any share sale at the holding company in Cyprus.

Then, on June 21, UMH announced it was to be acquired by Serhiy Kurchenko. The press release stated that the group had an 'option with Petro Poroshenko to acquire his stake in "Korrespondent" and other mutual projects,' and that the option "was implemented in April".

The deal appears to have been completed on 28 October, when a state bank issued Kurchenko with a $160m loan. On the same day, the directors of the Cyprus holding company changed.

Lozhkin has written of the deal in his book, The Fourth Republic. "Kurchenko was itching to take ownership, which is why the deal was closed four months ahead of schedule - in early November 2013."

Criminal enterprise

Kurchenko, it has emerged, was not buying UMH with money he had earned but with what he had stolen.

The Import Export Bank of Ukraine charged interest at 10.1 percent per annum and asked for security on the loan at a ratio of 178 percent. As security, Kurchenko offered some of the UMH assets and $50m in cash.

That money was held in three Cypriot companies, Quickpace Limited, Kviten Solution Limited and Sabulong Trading Limited. A secret court document released by Al Jazeera in January show those three companies were part of a massive "criminal enterprise" dedicated to stealing almost $1.5bn from Ukraine.

In February 2014, Ukraine had its second revolution in a decade, and Kurchenko ran to Russia, where he remains in hiding. Al Jazeera filmed his high-security arrival at an office in central Moscow last year.

The revolution led Kurchenko to default on the loan. On October 8, the bank wrote to tell him they had seized the $50m and that he still owed them several million more.

Kurchenko is now locked in numerous legal battles for his assets, including one with Forbes magazine in the United States, which is challenging him over his ownership of their Ukrainian franchise. Kurchenko is represented by lawyer and former Pennsylvania state senator Bruce Marks.

It is not suggested that the sellers knew about the dubious security for the loan used to pay for UMH, but we can question what due diligence was undertaken at the time.

Austrian investigation

Six days after the $160m loan to Kurchenko and the official change in ownership, Lozhkin reportedly received $130.52m from the Latvian bank account of BVI company Trejoli Business Ltd, which has been linked to Kurchenko.

The money went to an Austrian bank account held at Raiffesen Bank on behalf of his BVI company, Integrity International Holdings. The transfer led to a suspicious activity report being filed at the bank, which in turn triggered an investigation by the Austrian authorities into suspected money laundering.

Prosecutors decided not to proceed with the case. It was reportedly closed in 2016. The Vienna Prosecutor's Office said it had not received any evidence from Ukrainian officials of the illicit origin of the money.

"In Ukraine there is no investigation in this case, and there are no circumstances that would give grounds for such an investigation."

However, in light of the information released by Al Jazeera, it appears there may be grounds for further investigation. In 2016, Lozhkin wrote about the sale of UMH and about the man to which he had sold it, Kurchenko. He was unrepentant.

"Every oligarch has real – and alleged – skeletons in the closet," he wrote. "Does that mean you cannot make normal transparent deals with them? It does not, in my view. Otherwise we will never break out of the logic of cold war civil war and never-ending property redistribution."

Hours after Al Jazeera contacted the president and his adviser about this story, Lozhkin announced his dismissal from Ukraine's National Investment Council via social media.

"I am a businessman and an investor," he wrote saying he had founded a new investment company last year. "Now it is time to start the implementation of a number of investment projects."

Ukrainian and Austrian prosecutors declined to comment for this story. A spokesman for the president said he did not own directly or indirectly any shareholding in the United Media Holdings on October 28, 2013. Accordingly, Poroshenko did not receive any money from the sale referred to in our inquiry and thus may not have any tax liabilities in that regard.

He added that Poroshenko sold his shareholdings in all UMH projects in 2012 and May 2013 respectively.

Poroshenko dismissed Lozhkin from the National Investment Council on Thursday, hours after Al Jazeera contacted the men with questions about this story.

Al Jazeera is awaiting comments from Lozhkin.

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