One hundred happy days of Ukraine's oligarch Kolomoysky

Author : Igor Smolov

Source : 112 Ukraine

Kolomoysky’s direct proteges, close associates, and former colleagues are in president Zelensky's entourage
15:00, 6 September 2019

Ukrainian oligarch Ihor Kolomoysky

Society and the media are trying to find the fails and successes of Ukraine’s newly elected president Volodymyr Zelensky during the first hundred days of his cadence. With the exception of a triumphant victory in the parliamentary elections, in fact, he has nothing to present. One of the largest Ukrainian oligarchs Igor Kolomoysky, on the contrary, has something to tell about his achievements. But he prefers to create information smoke curtains from various fantastic initiatives - from the default of Ukraine to the general nationalization of industrial assets (so far, using the example of ArcelorMittal enterprise in Kryvyi Rih).

Related: Kyiv Court of Appeal not to remove arrest of Kolomoisky’s assets in PrivatBank case

The political monopoly of Kolomoysky is being formed. And we are not talking about a simple scheme "Zelensky = Kolomoysky." Although one of the most influential people in the administration of US President Donald Trump, Rudolph Giuliani insists on this version.

If you look at the political dynamics, the second most influential person in the state apparatus (according to Zelensky himself) was Kolomoysky’s direct protege head of the Presidential Office Andriy Bogdan. The latter lobbied Oleksiy Honcharuk for the post of the Prime Minister. The key office of the Minister of the Cabinet of Ministers was taken by Privatbank-related person Dmytro Dubilet, the son of Oleksandr Dubilet, chairman of the Privatbank board. Kolomoysky’s man, Andriy Zagorodniuk, became Minister of Defense. He is the son of Pavlo Zagorodniuk, a well-known businessman in the field of oil production, who is representing the interests of Kolomoysky in the supervisory board of Ukrnafta. Recall that head of the General Staff Ruslan Khomchak is also a person of Kolomoysky, that is, we can talk about Kolomoysky’s actual control over the Ukrainian army.  Up to 30 MPs from the Servant of the People party are under the direct control of Kolomoysky.

Related: No sense to invest in resolving of Donbas conflict, - Ukrainian oligarch Kolomoysky

Thus, Kolomoysky’s power vertical is formed in the political system. But, in fact, he is not interested in gaining the authority. Kolomoysky has always been and remains an honest fighter for banknotes. Taking into account the oligarch’s traditionally broad industry horizons, the above-mentioned personnel shifts in the future will unambiguously entail changes in the financial and Ukraine’s industrial landscape. They would certainly affect the most diverse sectors of the economy - the oil industry, the mining and metallurgical complex, air transport, retail and the banking sector.

Some political scientists say that the oligarch’s strategy is an increase in both political and economic influence. At the same time, the oligarch’s reputation in these matters raises questions, since in a number of cases the oligarch resorted to various methods of evading responsibility.

He might begin to grab hold of the assets. In the iron and steel sector, for example, Ferrexpo and Arcelor Mittal Kryvyi Rih may fall into the orbit of his interests.

Related: Airlines of Ukraine's oligarch Kolomoysky win tender for presidential flights

According to director of the Ukrainian Institute for Analysis and Policy Management Ruslan Bortnyk, the oligarch might use his current influence to defeat his opponents, in particular, ex-president Petro Poroshenko. For Petro Poroshenko the likelihood of an “scathing rebuke” is very high - if law enforces are involved, blind trust would not help him.

Kolomoysky might try to “milk” the state. The bare-bones agenda is the multi-billion dollar cashback from the PrivatBank nationalization. The best-case scenario is a cherished dream of national default. And the optimum program is to maintain its influence on the state oil industry - the Ukrnafta company, to receive a preferential electricity tariff for its ferroalloy assets.

Since the oligarch has his own people in the Ministry of Defense, Kolomoysky will now more often win tenders for the supply of fuel to the army.

Related: Five enterprises of Ukrainian oligarch Igor Kolomoisky make monopoly in ferroalloy market, - media

Kolomoysky will (or rather, has already begun) grab hold of his friends-oligarchs. Controlling over 30% of the Ukrainian market of ferroalloys, Kolomoysky companies have already begun price pressure on Ukrainian metal producers.

Currently, five of Kolomoysky’s enterprises constitute a monopoly in the ferroalloy market. Three plants and two mining and processing plants are under the control of his holding. At the same time, the style of doing business with a businessman in areas under his control does not give rise to optimism: employees of factories have lower salaries than in the industry, and the holding exports its products through intermediary companies at low prices.

Related: Poroshenko saved Ukraine from Russia, - Ukrainian oligarch Kolomoysky

As a result, the state annually loses millions of foreign exchange earnings and tax revenues. The situation with capital investments and the level of social protection at enterprises is no better. So, according to the reports of the trade union of metallurgists and miners of Ukraine, the level of salaries at the Nikopol and Zaporizhya ferroalloy plants is much lower than at other metallurgical enterprises.

In the recent past, the Ukrainian state made several attempts to monopolize state power in order to maximize profits in the private sector. In 2004, on the eve of the presidential election, the team of candidate Viktor Yanukovych tried to do something similar with the connivance (albeit forced) of President Leonid Kuchma.

Then, in 2005, the team of Prime Minister Yulia Tymoshenko tried to do this - by the way, in close alliance with Ihor Kolomoisky (again, taking advantage of the connivance of President Viktor Yushchenko).

Finally, the so-called “Family” (Yanukovych’s clan, - ed.) tried to do this with the support of President Viktor Yanukovych. With each such experiment, the country rolled back in its development. Why seek again thy cause for ruin?

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