Ukraine oligarch calls for nationalisation of industrial assets
One of Ukraine’s most powerful oligarchs has called for some of the country’s prized industrial assets to be nationalised, claiming that their privatisation was a criminal conspiracy to rob the state of billions of dollars.
Mr Igor Kolomoisky, a billionaire businessman, said that Ukraine should not receive any new funds from the International Monetary Fund until all “illegally” privatised property had been restored to state ownership.
Mr Kolomoisky said that “Ukraine is going round begging for money??and here is money that is due to the state. Return these enterprises, put them up for sale in an open tender and you will get 10 times more than you did [before],” adding that any new auctions could raise tens of billions of dollars.
Ukraine has secured a USD 17.5 billion rescue package from the IMF, and last week started talks on restructuring USD 15 billion in debt, as it seeks to plug a USD 40 billion hole in state finances over the next 4 years.
Mr Kolomoisky’s proposal represents a political bombshell, and a direct challenge to his fellow oligarchs who scooped up state assets at often knockdown prices in the privatisations of the 2000s.
Critics say his motives may be less patriotism or a sense of fair play than a desire to gain advantage over his business rivals in the febrile atmosphere of post-revolutionary Ukraine.
But opening up past privatisations could raise concerns over the sanctity of property rights in Ukraine and destabilise its already fragile business climate, experts warn, at a time when the country is struggling to cope with a deep economic crisis brought on by the war against Russian-backed separatists in the east.
Mr Arseniy Yatseniuk, Ukraine’s prime minister, reacted cautiously to Mr Kolomoisky’s proposal, telling the FT it could “open a Pandora’s box” if the decision on whether privatisations were right or wrong were made by a “corrupted judiciary”.
Mr Igor Kolomoisky and partner Mr Gennady Bogolyubov manage their assets through a web of offshore entities. Interests include banks, energy, petrochemicals and mining.
Mr Kolomoisky’s call comes amid intensifying disputes between Ukraine’s oligarchs. The most public of these is the multibillion-dollar legal battle being heard in the High Court in London that pits Mr Kolomoisky against Viktor Pinchuk, a rival tycoon.
The two are fighting over ownership of a Ukrainian iron ore mine, KZhRK, part of a state-owned conglomerate known as Ukrrudprom sold off in 2004. The case is being closely watched amid concern it could set a precedent for disputes over further assets.
Mr Pinchuk, son-in-law of Leonid Kuchma, Ukraine’s then-president, claimed in his lawsuit that Mr Kolomoisky and business partner Gennady Bogolyubov bought the stake in KZhRK on his behalf, but then reneged on an agreement to transfer ownership of the shares to him.
However, Mr Kolomoisky said both he and Mr Bogolyubov reject this version of events. In court filings, Mr Kolomoisky claimed Mr Pinchuk demanded the stake in KZhRK in return for Mr Kuchma signing the legislation privatising Ukrrudprom. Speaking in parliament, he accused Mr Pinchuk of effectively trying to “extort a bribe”.
Mr Pinchuk’s office said that he rejected “all suggestions of wrongdoing”. Mr Kolomoisky’s allegations were “simply the latest stage? [of] an improper campaign to put pressure on Mr Pinchuk to call off his lawsuit”, the statement said. “As with previous attempts, it will not work.”
Source - The Financial Times