Billionaire tycoon Igor Kolomoisky on the course of dangerous collision with the Ukrainian government


Igor kolomoisky

Igor Kolomoisky, billionaire and governor of the Dnipropetrovsk region, in his cabinet at the seat of the regional government in Dnipropetrovsk in May.

REUTERS / Valentyn Ogirenko

Igor kolomoisky was once called Ukraine “secret weapon“as the 52-year-old billionaire raised his own private army to fight separatist forces attempting to capture the country’s third largest city. The Kiev government now faces a dangerous stalemate with one of its most important allies.

The bank tycoon was sacked Wednesday by Ukrainian President Petro Poroshenko. Kiev now faces the loss of an ally with thousands of heavily armed soldiers at its disposal.

In March last year, Kolomoisky, who founded Ukraine’s largest commercial bank, Privat Bank, was appointed governor of Dnipropetrovsk Oblast, a predominantly Russian-speaking region in the eastern part of the country.

The collapse of President Viktor Yanukovych’s government led the neighboring eastern regions of Donetsk and Luhansk to declare independence from Kiev, and The Dnipropetrovsk oblast has become a flashpoint. TThe government has become desperate to stop the advance of the rebels there, and the separatists also became determined to restore it as part of what Russian President Vladimir Putin called Novorossiya, or New Russia.

As the situation descended into war, the region found itself exposed and the new Kiev government was ill-equipped to provide it with the financial or military resources needed to push back the Moscow-backed separatists. So the work returned to Kolomoisky. Or rather Kolomoisky took it, with Kiev’s grateful acceptance.

At a cost of around $ 10 million per month, according to the Wall Street Journal, Kolomoisky began to build up his army. In June, the Dnipro battalion consisted of more than 2,000 heavily armed soldiers, with 20,000 more in reserve under the command of Kolomoisky’s close ally and self-proclaimed “conflict manager” Gennady Korban.

Although a businessman, Korban was no stranger to life and death situations, having survived an assassination attempt in March 2006 when his car was hit by assailants armed with machine guns. The two men are known for their aggressive business methods, although they have said that in other countries their actions would simply be labeled “mergers and acquisitions.”

Having managed to keep Dnipropetrovsk in government hands despite fierce fighting, the appointment appears to have been a success. This, however, was questioned last week when masked armed men stormed the headquarters of the state-owned oil company UkrTransNafta in the Ukrainian capital Kiev following the dismissal of its director Oleksander Lazorko, a key ally of Kolomoisky.

Two Ukrainian parliamentarians accused Kolomoisky of sending armed men, and the billionaire himself later got out of the building and started arguing with members of the press who had camped outside.

Although the building returned to government control over the weekend, the fact that it was allowed in Kiev is a major source of embarrassment for Ukrainian President Petro Poroshenkothe administration of. It also comes at an extremely sensitive time as the government begins to undertake large-scale economic reforms in exchange for a bailout estimated at £ 26.9 billion ($ 40 billion).

Poroshenko was urged by the deputies to “put [Kolomoisky] in his place ”, and indeed he later told the soldiers in the capital that“ we will not have a governor with their own pocket army ”. most strategically important allies.

The question that no one seems quite capable of answering is what happens next.

Although he only owns 42% of UkrTransNafta, Kolomoisky has grown accustomed to the de facto management of his business operations. However, as reported by the Financial Times, a new law passed in parliament effectively returned control of the company to the state, which holds 50% plus one share. The new law reduces the number of shareholders required to vote at a meeting, a move widely seen as detrimental to the interests of Kolomoisky’s Privat group.

In interviews on Ukrainian television, supporters of Kolomoisky accused the president of launching a politically motivated attack on him. Meanwhile, the governor has called for the past privatization of state assets to be reconsidered, which is likely to anger his fellow oligarchs and which could be interpreted as a challenge for the state.

The idea of ​​a standoff between powerful factions within the Ukrainian state – especially those with their own private armies – will hardly reassure international donors who are being asked to release additional funds. for the besieged country. Yet imposing state control over its portfolio of assets is also likely to be essential if it is to implement the economic reforms demanded by the International Monetary Fund.

There are already signs that Kiev is ready to compromise, with Kolomoisky announcing that the new chairman of the company will not conduct any inquiries into its finances. This, however, may simply be a temporary lull in a feud that threatens to pit powerful business interests against the government’s reform agenda.


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