Ukraine President Targets Oligarchs as World Focused on Russian Buildup
While Ukraine President has downplayed likelihood of invasion by Russia, he is targeting what he sees as another threat: oligarchs
(Bloomberg) -- While Ukrainian President Volodymyr Zelenskiy has downplayed the likelihood of a large-scale invasion as Russia masses troops near the border, he is targeting what he sees as another threat to his country’s sovereignty: oligarchs.
The president in a national address Monday slammed unidentified businesspeople for fleeing the country in the face of a U.S. warning of a potential imminent assault. Russia has repeatedly denied it is planning to attack.
Zelenskiy, a former comedian who campaigned in 2019 on promises to take back power from oligarchs in the former Soviet republic, has increased pressure on the rich since Russia began building up troop levels in November. Ukraine’s most influential businessmen have less than three months remaining to unload assets that qualify them as oligarchs under a law passed last year.
“It’s like playing chess simultaneously against several opponents,” said Volodymyr Fesenko, head of the Penta research institute in Kyiv. “It’s a peculiarity of Ukraine’s politics. Here external threats never distract the government from combating internal opponents.”
After Zelenskiy’s comments, Ukraine’s richest man, Rinat Akhmetov, returned to the country. His spokeswoman, Anna Terekhova, posted a picture on Facebook of him Wednesday in the Azov Sea port of Mariupol.
The September law allows the National Defense and Security Council to define an oligarch using three of four criteria: their participation in public life, level of influence over mass media, ownership or control of a company with a monopoly and whether assets exceed 2.4 billion hryvnia ($85 million).
Those given the label will be forced to disclose their assets and be banned from financing parties, holding government posts and participating in privatizations.
Justice Minister Denys Malyuska identified Akhmetov and billionaire Igor Kolomoisky as potential targets in a Forbes Ukraine interview.
Pressure has been exerted in different ways, as well. Billionaire former President Petro Poroshenko, was ordered in January to surrender his passports during a treason investigation that he calls political. Akhmetov’s Metinvest BV was raided in a tax probe Feb. 1.
Ukraine, which is among the poorest countries in Europe, has also sought to increase taxes on mining, iron ore and metal businesses that are concentrated in the hands of businessmen who also control its main media outlets, including Akhmetov and Kolomoisky.
Akhmetov via his press office criticized the oligarch law as a violation of human rights that won’t help Ukraine develop, and said Metinvest is a responsible taxpayer. Kolomoisky and a spokesperson for Poroshenko did not respond to requests for comment.
Poroshenko sold his media assets to allies after the law was passed, and has criticized the legislation as an attempt “to shut up the independent media.”
Kolomoisky praised the law in an interview with Ukrayinska Pravda Tuesday, saying it will help the rich justify the source of their wealth for foreign banks. A U.K. court froze some of his assets in 2017 and he and his family were sanctioned by the U.S. last year for corruption.
The focus on local power brokers comes as Ukraine finds itself at the epicenter of the biggest European security crisis since the Cold War. Russia has deployed over 100,000 troops near the border in what Western officials say could be a prelude to an invasion.
President Vladimir Putin blames the tensions on the West. He has called on the U.S. and NATO to provide security guarantees and block more former Soviet states from entering the alliance.
The crisis hasn’t rallied the nation around Zelenskiy, who is up for re-election in 2024. In a January Kyiv International Institute of Sociology poll, 24% of voters support the president, while Poroshenko trailed him by less than the margin of error.
The situation may be an attempt to copy Putin’s strategy at the beginning of his presidency to reassert state’s authority by asserting control over the media and arresting Russia’s then-richest person, Mikhail Khodorkovsky, according to Viktor Zamyatin, an analyst at the Razumkov Center for Economic and Political Studies in Kyiv.
“I don’t think it will work,” Zamyatin said.
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