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7 Nov, 2022 16:08

Ukraine nationalizes company of one-time Zelensky backer

Billionaire Igor Kolomoysky has his assets seized as several companies are taken under state control
Ukraine nationalizes company of one-time Zelensky backer

The Ukrainian securities regulator, the National Commission for Securities and Equity Market (NKTsPFR) has ordered the nationalization of some of the top national companies, using emergency wartime authority as legal grounds, the country’s media reported on Monday. Some of the stakes were previously owned by billionaire Igor Kolomoysky.

The news was broken by the website Ekonomicheskaya Pravda and later confirmed by other outlets as well as by the country’s security council.

Among the targets for nationalization were oil producer Ukrnafta, the firm Ukrtatnafta, which owns a major Ukrainian petrol refinery, helicopter engine producer Motor Sich, automaker AvtoKrAZ, and electricity equipment producer Zaporozhtransformator.

One of the individuals whose interests were sidelined by the decision is controversial billionaire Igor Kolomoysky, whose stakes in Ukrnafta and Ukrtatnafta have apparently been taken over. According to the news outlet Strana, he and his team “were shocked” by the development, which none among them anticipated.

Kolomoysky was previously considered a powerful figure behind President Vladimir Zelensky, whose entertainment career started in the tycoon’s media empire. The businessman controlled the Ukrainian ‘1+1’ media holding. The group owned several TV Channels, including those that broadcast Zelensky’s comedy shows, as well as the hit comedy series “Servant of the People,” starring the current Ukrainian president.

The supposedly close ties between the billionaire and the comedian-turned-president earned Zelensky a nickname of Kolomoysky’s “puppet” among his rivals, including the former Ukrainian president, Pyotr Poroshenko. Kolomoysky himself said he “wanted” Zelensky to become president back in 2019 while denying close contacts with the then-presidential candidate.

The commission designated the Ukrainian Defense Ministry as the operator of the nationalized companies and cited emergency government powers during wartime as justification for the change of ownership. The National Defense and Security Council stated that the seized assets “may be returned” to their original owners after martial law in the country is lifted, or a compensation may be paid to them.

Motor Sich, one of the nationalized firms, came into the Ukrainian public spotlight last month after its long-time head and former co-owner Vyacheslav Boguslaev got arrested for allegedly supplying helicopter parts to Russia. An aide to President Zelensky suggested at the time that the man could be exchanged for Ukrainian POWs held in Russian custody.

In 2017, Boguslaev sold his share in Motor Sich to Chinese investors, but Kiev opposed the sale. Last year, Zelensky ordered the company’s nationalization, amid a legal battle over ownership with the Chinese buyers.

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