Energame, the newly founded company, is dynamically entering the map of the technology ecosystem in Cyprus with an ambitious plan that aims to unite 30 years of know-how, investment opportunities, assets and customers.
Energame is a consulting and investment advisory firm specialising in online entertainment. The company manages the development and strategy of a diverse range of clients in the iGaming sector.
In addition, Energame offers a comprehensive range of management services to both early-stage and mature iGaming companies, as well as businesses that provide services to this industry.
Energame CEO Maksym Liashko talked exclusively to Economy Today Magazine about how the need to establish Energame arose and the vision for a company that acts as a consulting hub for different clients in the iGaming sector.
Maksym Liashko broke down the history of how one of the clients, Parimatch Ukraine, came under sanctions from Ukraine, revealing the contradiction of being credited for contributing to the Ukrainian resistance while being accused of ties to Russia.
Speaking to Economy Today, he rejected the allegations of the relevant Ukrainian sanctions office and explains how Parimatch Ukraine will extricate itself from this unfair and uncomfortable situation.
Then Maksym Liashko explained why they chose Cyprus as a base for Energame and what the advantages are that make Cyprus an attractive investment destination.
Interview with Xenios Messaritis
What is the significance of the establishment of Energame and what is the role and the potential contribution of the new company to the success and growth of the Parimatch group of companies?
We created the company last year and it started operations on January 1, 2023. The creation of this company is of great importance to us as it allows us to leverage our combined expertise of over 30 years in the iGaming industry, which includes both B2C (Business to Consumer) as well as B2B (Business to Business). Our primary objective is to use our accumulated experience and assets at our disposal for the benefit of our clients’ companies in order to create synergies that will be beneficial to all involved. This perspective is of enormous importance to us.
In addition, we aspire to offer consulting services to other companies, providing guidance to various clients beyond our immediate circle. To do this, we envisioned a separate company that would act as a consulting hub for different clients. Essentially, Energame is governed by the core principle of integrating expertise, assets and customers to create successful ventures. We look forward to thriving in this dynamic industry by sharing our knowledge and offering valuable solutions to those who seek our guidance. In addition, we encourage our major clients to establish a presence in Cyprus, further modernising our efforts here and ensuring rapid progress on our projects.
It’s somewhat of a rare venture, moving from the iGaming industry that Parimatch established into the advisory and asset management sector. How can you see yourself succeeding in this new startup path?
During the growth phase of Parimatch Group, we started to see the prospects in numerous M&A deals – acquiring different companies and acquiring their ownership status. Before taking any action, we clearly carried out a thorough due diligence process. Several years ago, in conducting this process of finding suitable investment targets, we gained extensive knowledge and formed our own views on various potential targets, evaluating their strengths, weaknesses and opportunities for improvement. Although no M&A deals took place during this period, the owners of the businesses we considered potential targets took our advice to reduce prices and enhance their value. It is worth noting that those who implemented our suggestions recorded remarkable growth.
This realisation made us realise that we were inadvertently providing free expertise to these companies while operating solely as a consulting firm. Consequently, we re-evaluated our approach and decided to evolve our business model. Now, we offer comprehensive services, including audit services, support of day-to-day operations, advice on strategic decisions, assistance in marketing efforts and other business strategies. We approach potential clients by proposing to analyse their company and demonstrate our ability to bring about positive change through adjustments to their strategies or tactical operations. We move forward with determination to realise the goals of every project we undertake. As we progressed with these services, it became apparent that an additional company, Energame, was needed to manage and work with customers and their assets.
So you’ve pretty much used the accumulated knowledge since founding Parimatch in 1994 and with Energame you’re trying to bring your experience to market?
Obviously, but we must emphasise that in addition to the operation and management of our clients’ assets, we extend our services to other companies related to us. It is important to understand that Energame operates primarily as a management consultant and not as an asset management company. Our clientele consists of various entities from the iGaming industry. For example, we provide management consulting services to companies such as Parimatch Cyprus, which is one of our clients.
In addition, we offer our expertise to support the development of the Parimatch brand, a distinct aspect of our services. In addition, we work with technology companies active in the iGaming sector in different geographical locations, providing customised consulting solutions according to their specific needs, be it platforms, software or other technical aspects. We have the ability to operate effectively and assist these different entities in their respective endeavours.
Now about the sanctions chapter. Four months have passed since the Ukrainian government imposed sanctions on Parimatch Ukraine. What is the current status of these sanctions and frozen funds?
Regarding sanctions, it is sad to discuss this situation. However, we have to face the fact that as of March 2023, Parimatch Ukraine, a company operating in Ukraine, is facing challenges due to the imposition of sanctions. As a result, the funds and functions of the Ukrainian company and Ukrainian customers are blocked. From the very first day, we closed the website in Ukraine to demonstrate our compliance with the law and respect for the decisions made. Also, all bank accounts in Ukraine are frozen, as we prioritise compliance with the regulations, even though we don’t agree with them.
Since then, we have been diligently working on various strategies and plans, although we believe that this decision is unjustified, as there is no evidence to support the claim that Parimatch Ukraine is a Russian company or has connections with Russia. The franchise was stopped and the Parimatch brand was taken from Russia during the first month of the Russian invasion of Ukraine. This fact is substantiated by numerous documents and legal opinions from reputable international legal and technical firms. We are preparing to deal with this matter to send it to the authority that made this decision.
The work of foreign representatives was less affected by the imposed sanctions: operational activities, for example, on the territory of Cyprus remained, and cooperation with partners in Great Britain and on the African continent remained. And we are grateful to the authorities and regulatory bodies in these countries who made their own decisions based on the information provided to them.
So you will send the evidence you have to the Ukrainian authorities. How do you explain this incident with the sanctions? Is it because of paperwork? What exactly is the reason? How do you comment on the contradiction that you support the defence of Ukraine since the beginning of the war and a few months ago you were sanctioned by the same country?
The Ukrainian authorities, in particular the Security Service of Ukraine, are at the centre of our efforts to prove the absence of any connections with Russia. Both at the level of ownership and at the operational level, there are no such connections. Nevertheless, we are in an unusual situation where, on the one hand, we have received recognition and awards from the President of Ukraine for our assistance to the country. On the other hand, we have suffered sanctions imposed by the same nation. We have contributed a significant donation of 14 million euros to the Ukrainian government since 2022.
However, we recognise and respect the sanctions mechanism. In times of war, a country must use all available measures to protect its interests, whether at the international or local level. The country is doing everything it can to defend itself, and sanctions play a role in those efforts. However, the ongoing war disrupts normal processes, often leading to misjudgments. Previously, sanctioning might have required multiple opinions from different authorities, but in times of war, a single opinion is sufficient. This example shows that in such cases mistakes are possible.
In the case of Parimatch Ukraine, we believe that such a decision is the result of a mistake in the sanctioning mechanism. However, we recognise the overall importance of using such mechanisms to protect the nation’s interests. Mistakes may happen, but the country’s commitment to securing its sovereignty remains paramount.
Where will you be deposited and what is the process you chose to overturn the Ukrainian sanctions regime?
Due to the ongoing war, it is a big challenge to ascertain the most effective approach to defend the reputation of Parimatch Ukraine and modify the sanctions list. In essence, there are three main mechanisms to be pursued: providing evidence to challenge the sanctions, seeking the competent authorities to accept the presumptions we will cite, and conducting a proactive dialogue to address the situation.
We are diligently preparing all the required documents to present our case and will appeal for a review of the sanctions status decision. On July 25, the President of Ukraine, Volodymyr Zelenskyy, instructed the Prime Minister of Ukraine, Denys Shmyhal, along with the Interdepartmental Working Group on Implementation of the State Sanctions Policy, to conduct an independent assessment re-evaluating the reasons behind the imposition of the Ukrainian sanctions regime on Parimatch companies.
First, we will fully cooperate with the authorities and provide all the information required by the resulting investigation, the second way is the local courts of Ukraine and if there is no result we will turn to the European courts. Our aim, however, is to use all local mechanisms of Ukraine to secure our interests.
Is there a possibility in the near future that Europe will adopt Ukrainian sanctions against Parimatch?
I am absolutely certain that similar sanctions against our companies will not be adopted elsewhere. When we look at the differences in legislation between the European Union, the United Kingdom, the USA and Ukraine, we can see significant differences. Sanctioning in these jurisdictions requires the Sanctions Committee to provide valid justifications, clearly listing the reasons for such actions. In cooperation with the sanctioning authorities, we have diligently presented all the necessary documents and through this commitment, it has become clear that there is no reason for sanctions.
We have a dedicated legal opinion team that thoroughly assesses the situation in various jurisdictions, including Brussels, the UK, the US and others, and their findings consistently show that there is no reason for us to be included on any sanctions lists in either the EU, the US or in the United Kingdom.
In addition, it is important to emphasise that there are no connections with Russian entities.
How many people are currently working for Energame in Cyprus and what are their nationalities?
There are currently more than 150 employees associated with Energame, including those who work for our clients and provide consulting services. They have settled not only in Limassol but also in Larnaca and Nicosia, together with their families. About 50% of these workers are Ukrainians, while the remaining 50% are Cypriots. We are pleased to encourage our clients and the companies we serve to consider relocating some of their workforce to Cyprus.
The island is undergoing significant positive changes in the banking and financial sector. In addition, there is a significant number of Ukrainians who wish to work here. Facilitating their employment in Cyprus would be beneficial to the local economy as they can contribute to the development and productivity of the region instead of being seen as temporary refugees from Ukraine. We are actively trying to support this initiative by exploring opportunities to create new companies and create more employment opportunities locally.
So why did you choose Cyprus to establish Energame?
Cyprus emerged as the ideal location for Energame due to various factors. Undoubtedly, the favourable business environment and tax regime provided additional advantages. In addition, Cyprus is a popular investment destination, attracting many leading companies.
However, the primary reason for choosing Cyprus was that the core members of our team have resided here for more than five years. It was a natural step for us to establish our new company in a place where we already know the environment, the people and feel part of the local business community.
More generally, what are the main reasons that make Cyprus an attractive destination for companies?
Clients have various reasons for choosing Cyprus as their preferred location. A serious reason is the ease of integration of workers into the country’s ecosystem. Another key factor is the favourable tax regime that Cyprus offers. However, the most important reason is the seamless integration into multiple ecosystems. Cyprus acts as a hub not only for the iGaming industry but also for many technology and innovation companies. Within this environment, businesses can find specialised solutions to meet their specific needs. In addition, Cyprus provides abundant investment opportunities, which are also facilitated by the mechanisms for raising investment funds. This creates opportunities to secure funding for potential projects or partner businesses. In addition, the strategic geographical location of Cyprus is a great advantage for businesses. The central location offers easy access to various destinations, making trips to Dubai or London extremely convenient for business.
Do you think this tech ecosystem can get bigger in Cyprus?
The growth potential is evident, however, it depends on what local authorities will do to protect this sector. A stable regulatory environment is paramount for technology companies to thrive. Protecting the ecosystem and associated businesses is a key priority. Identifying more productive areas can further stimulate growth. Cyprus offers an excellent environment for the establishment of companies, asset management and effective cooperation with banks. However, it is important to recognise the need for amendments and upgrades to the judicial system to ensure effective protection of interests, both in private agreements and in day-to-day courtrooms in Cyprus.
In addition, while the various Investment Incentive or Residence Permit Programs mainly target technology companies, our portfolio includes non-technology entities such as marketing companies. Extending the benefits to include all business companies present in Cyprus would be beneficial. It is commendable for a country to protect its workplaces and industries. However, excessive intrusiveness should be avoided. Striking the right balance between protection and the ability of the market to operate freely with room for initiative fosters a dynamic business environment.
We see that, in general, Parimatch carries out several types of Corporate Social Responsibility activities. Will Energame continue this tradition?
Maintaining the principles that have guided us over the years is of the utmost importance to continue. Our Corporate Social Responsibility activities in Ukraine have focused on strengthening sports and supporting various sports initiatives.
We bring these same principles to Cyprus, where we actively participate in activities with children and athletes. These initiatives are an important part of our commitment to such actions in Cyprus.
In addition, we aim to involve our customers in these CSR projects, encouraging businesses to take responsibility for important issues, not only globally but also locally. By actively participating in CSR projects in Cyprus, we aim to show that businesses are willing to contribute to positive changes in their communities and to be socially responsible.
Disclaimer: This interview originally appeared in Economy Today and is being republished by the Cyprus Mail with the permission of the magazine.
