Ukraine takes control of five “strategic” companies from oligarchs

Ukrainian President Volodymyr Zelenskyy said on Monday that Kyiv had transferred five strategic companies from former oligarchs to state control as part of the country’s war effort.

The Ukrainian government seized ownership of the country’s leading national oil producer Ukrnafta and Ukrntatnafta, the country’s largest refinery, which shut down after being hit by Russian missile attacks in the early months of Moscow’s sweeping invasion of Ukraine.

Both companies were controlled by Igor Kolomoisky, an oligarch who backed Zelenskyy’s 2019 presidential candidacy and is now facing investigations into the bankruptcy of PrivatBank, another of his previous companies.

Kyiv also took over MotorSich, a manufacturer of aircraft turbines and helicopter engines based in Zaporizhzhia, a city near the front lines in the south.

“Such steps as are necessary for our country in a state of war . . . will help meet the urgent needs of our defense sector,” Zelenskyy said in a statement to the Telegram channel. “In these difficult times, we must focus all our efforts on liberating our country and people and supporting the Ukrainian army.”

The state confiscations – which other officials described as temporary – come after weeks of Russian missile and kamikaze drone strikes on power infrastructure across Ukraine led to hour-long daily blackouts and power rationing across the country.

They also come a year after the president pushed through parliament so-called “de-oligarchization” reforms aimed at curbing the influence of the country’s wealthiest businessmen.

Kolomoisky is facing national and international investigations into the insolvency of PrivatBank. The commercial lender was nationalized in 2016 after authorities revealed more than $5 billion in losses that were not reflected on its balance sheet.

Vyacheslav Boguslaev, former owner and president of MotorSich, was arrested last month on charges of treason. Local prosecutors claim he funneled helicopter engines that Moscow needed through sanctioned export operations.

Boguslaev sold his majority stake in MotorSich to Chinese company Skyrizon many years ago, but Ukrainian trust and security authorities blocked the move by freezing the shares. Both Kolomoisky and Boguslaev have denied wrongdoing.

AvtoKraz, a truck manufacturer that makes vehicles for domestic military transport and missile systems, was also among the groups brought under state control. It was previously owned by Ukrainian oligarch Kostyantyn Zhevago, who has been living in exile in recent years as Ukrainian authorities pursued cases against him in connection with the bankruptcy of a bank he previously owned.

Zaporizhtransformator, a Zaporizhia-based manufacturer of power supplies, was also seized by the state. The seizure of the company, previously owned by businessmen like Kostyantyn Grigorishin, aims to ensure a stable supply of parts needed to repair Ukraine’s power infrastructure.

At a joint news conference Monday with Zelenskyi’s national security chief Oleksiy Danilov and Prime Minister Denys Shmyhal, Ukraine’s Defense Minister Oleksiy Reznikov insisted that the state’s takeovers of these companies do not legally constitute “nationalizations”.

“This is a direct takeover of assets during the war. These are completely different legal forms,” Reznikov was quoted as saying by Reuters.

https://www.ft.com/content/c1eb81af-70d4-48f9-bba0-b96d654e19b6 Ukraine takes control of five “strategic” companies from oligarchs

Adam Bradshaw

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