Key Yanukovych’s ex-sponsor Akhmetov bets on Poroshenko during 2019 elections

Author : Denys Seleznev

Source : 112 Ukraine

After Poroshenko declared war with oligarchs, the net of his key sponsor and Ukraine's largest oligarch Akhmetov is growing 12 times faster than Ukraine's GDP
13:29, 20 February 2019

Open source

According to the Bloomberg Billionaires Index, just in January 2018, Ukrainian oligarch Rinat Akhmetov has increased his wealth by 830 million US dollars. People familiar with the Ukrainian realities know that one might get such capital only with the facilitation of the state. This is the answer to the question on Ukrainian richest man’s position at the presidential elections-2019.


IMF vs. war makes some people rich

Unfortunately, many, by inertia, perceive Akhmetov and politicians associated with him, such as Vilkul or Novinsky, as a kind of opposition to Petro Poroshenko. This is, if I may say so, some “phantom pain” of the voters, inherited from Yanukovych’s Party of Regions. Everything used to be pretty simple before 2014; there were Party of Regions members, supported by the southeast electorate, and there are pro-Western politicians, who masked themselves to be “democrats.” Blue and orange, a bipolar world if you want, which has lasted for ten years in Ukraine. But Ukraine has changed since then and, of course, its political realities have also changed.

Related: Why oligarch Akhmetov snatched control of Ukraine's critical infrastructure

Open source
Indeed, it could be said that right after the Maidan, Akhmetov was forced to stand in opposition. Not because a war erupted in his native region, to which he fully owes his heights, a war, which caused mass death of people and numerous destructions. In the spring of 2014, Poroshenko announced a campaign against the oligarchs in order to stop their political influence on the country. And Akhmetov, as one the largest of the oligarchs, was the main goal of this campaign. Therefore, 2015 has become one of the most difficult periods for Rinat Akhmetov. On the one hand, his companies, especially DTEK (a strategic holding company that develops business streams in the energy sector, - ed.), were squeezed by debts, and, on the other hand, he had to fight off attacks from the government and the president. The new government claimed that the prices of coal mined at the Akhmetov mines were too high, Akhmetov, in turn, mouthed off by miners ’protest demonstrations. Ministry of Energy proposed to adopt a law, according to which after the sale of 25% of the state-owned shares of Dniproenergo, Zakhidenergo, and Kyivenergo, the buyer would have the right to buy 75% of the package of these energy companies from Akhmetov. Buyback them forcibly. In fact, it was an attempt on the business of the former sponsor of Yanukovych’s party. In addition, at the end of 2015, Anti-Monopoly Committee launched an investigation against DTEK, which was quite natural, considering that the company controls 80% of the country’s thermal power generation, 80% of coal production, and 33% of the distribution networks.

Subsequent events showed that all these threatening actions in relation to energy companies were nothing more than coercion to cooperate with Poroshenko. By January 2016, the cost of DTEK’s debt obligations fell to a minimum. Apparently, the conclusion of a “peace deal” between the biggest oligarch and the oligarch-president happened then. First, the ICU financial company, which (by an amazing coincidence) belonged to Poroshenko’s close associates, then Minister of Energy a Demchyshyn and the then head of the National Bank Hontareva began to buy up the debt obligations. And then the head of the electricity regulation commission becomes a former employee of ICU and at the same time former employee of Roshen Vovk, who in April 2016 introduced Rotterdam+ coal pricing formula. The cost of purchasing coal using this formula instantly rises by a quarter, which until the end of 2016, brought DTEK some additional 350 million USD of revenue. Naturally, at the expense of ordinary Ukrainians, as the authorities immediately raised electricity tariffs. By the way, the government has linked the tariff increase with the IMF requirements, which constantly demands to raise the utility costs.

Related: Akhmetov rose in Bloomberg rating of billionaires placed 393rd

DTEK's debt bonds have quickly soared in price after raising tariffs by 40% in just a couple of weeks. The war with the oligarch has turned into cooperation, which just in a few months brought Poroshenko’s team immediately tens, if not hundreds of millions of dollars (Akhmetov's debt obligations).

DTEK’s operating profit began to grow sharply since the second half of the year. For example, if according to the results of the first two quarters of 2016, it amounted to 107 million USD, then according to the results of the third and fourth quarters – it has reached already 535 million USD.

Penny and penny laid up will be many

Another Poroshenko gift to Akhmetov, which also “meets the requirements of the IMF,” was the sale to of a 25% state-owned stake of five Ukrainian power companies. They were cheaper than at the time of Yanukovych when Akhmetov was also a completely pro-powerful oligarch and had the opportunity to acquire pieces of state strategic industry on the most favorable terms.

Related: Backstage negotiations: Energy crisis puts Poroshenko and Akhmetov together

Interestingly, after 2004, when Viktor Yushchenko threatened to crush the Akhmetov’s gang band, Rinat Akhmetov also managed not only not to lose his fortune, but, on the contrary, to acquire new enterprises at moderate prices. Such as, for example, Pavlogradvuhillia or coal enterprises in Western Ukraine. And now, according to Dragon Capital’s estimates, Akhmetov’s fortune has reached more than $ 12 billion, an unprecedented amount even for the times of Yanukovych, and it is growing 12 times faster than the country's GDP!

Bread buttered on both sides (between Akhmetov and Poroshenko) did not stop. For example, in early December, the Verkhovna Rada with the participation of Bloc of Petro Poroshenko faction and, of course, Radical party of Lyashko adopted changes to the Tax Code that exempt from paying taxes when importing power equipment. This allows the DTEK owner to save about 107 million USD in 2019. Poroshenko signed this law without any delay.

Well, that was nothing to the fact that the president approved a further expansion of the oligarch's energy holdings. On the very New Year, December 28, 2018, the Antimonopoly Committee voted to close the case against DTEK, launched against the company in late 2015, just when Poroshenko declared war with the oligarchs.

Related: Akhmetov’s company finished 2014 with $1.84 bln loss

The case was closed in order to allow Akhmetov to begin buying shares of a number of power companies from the Russian company VS Energy. Surprisingly, but so far, 17% of the capacity of the regional electricity distribution networks in Ukraine still belonged to Russian owners. According to officials, Akhmetov paid the Russians for a controlling stake "Odesaoblenergo" and "Kyivoblenergo" about 250 million USD. Probably on the order also owned VS Energy shares "Zhytomyroblenergo," "Kirovogradoblenergo," "Khersonoblenergo," "Rivneoblenergo," "Chernivtsiblenergo." If these transactions are completed, instead of the current 33%, DTEK will control 50% of all the country's electricity distribution facilities. And this is in addition to the fact that DTEK, as mentioned above, controls 80% of thermal power generation and 80% of coal production in Ukraine.

Is there a reason for Akhmetov, given such successes in the past three years, to stand into opposition to Poroshenko?

That is why the Poroshenko administration entrusted Akhmetov and his political projects with the task of splitting the South-East and opposing Viktor Medvedchuk's plan to unite the opposition to participate in presidential and parliamentary elections.

Related: List of Akhmetov’s assets to be frozen by court’s decision

Oligarchic projects

On the one hand, he put forward presidential candidate Oleksandr Vilkul, whose task is to take Boiko’s voices and weaken him in the fight against Poroshenko for entering the second round (and such an outcome is quite likely if Zelensky leaves the race). On the other hand, Akhmetov’s creator is the scandalous Oleg Lyashko, who, firstly, has to delay Tymoshenko’s votes, and, secondly, is obliged to ensure the victory of oligarch-controlled MPs in parliamentary elections.

Related: Meet 39 candidates running for president in Ukraine

Pulling the votes of Boiko and Tymoshenko away is a special service for which Akhmetov now receives billions of dollars of preferences and assistance from the Antimonopoly Committee in expanding its energy assets from Poroshenko. However, the media Akhmetov, among other things, is also directly promoting Poroshenko. For example, "Ukraine" TV channel (by the way, it has also become twice richer during its "oppositional stance") shoots the whole films about the current president, in which he plays the role of a national leader and actively promotes his triad "army, language, faith."

Related: Far right clashes with police in Kyiv: Criminal case on police abuse opened

This is why Poroshenko differently treats different representatives of the oppositional forces. A large information campaign is being conducted against such candidates as Tymoshenko and Boiko, as well as Vilkul and Lyashko. All this should not be misleading - Poroshenko is beneficial to Akhmetov and he will support him as long as there are at least some chances for Poroshenko to keep the presidency.

Read the original text at

Система Orphus

If you find an error, highlight the desired text and press Ctrl + Enter, to tell about it

see more
latest news
editor's choice