Poroshenko Warns Oligarch Rival over 'Pocket Army'

The situation remains extremely tense in Kiev as Poroshenko vows to bring Kolomoisky associates to justice

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How will Poroshenko defend his chocolate kingdom from Kolomoisky's bands of armed fanatics?
How will Poroshenko defend his chocolate kingdom from Kolomoisky's bands of armed fanatics?

This article originally appeared at Financial Times

Ukraine’s President Petro Poroshenko warned on Monday that no regional governor would be allowed a “pocket army”, after armed men took up positions around an oil company in which Igor Kolomoisky, the billionaire oligarch and governor, is battling to retain control.

The stand-off threatened to escalate into a full-blown clash between the country’s wealthy president and a rival oligarch who has long been one of Ukraine’s richest men but since last year’s Ukrainian revolution has also developed a political power base.

Mr Kolomoisky accepted the role of governor of the central Dnipropetrovsk region last year as Ukraine’s new government tried to stabilise the country after the president at the time, Viktor Yanukovich, was toppled by anti-government protests. He has also funded volunteer militias fighting Russian-backed separatists in Ukraine’s east.

The billionaire has long exercised management control over Ukrnafta, an oil producer, despite owning only 42 per cent. But a law passed by Kiev’s parliament has attempted to enable the state, which owns 50 per cent of the company plus 1 share, to retake full control.

In an unusual scene, camouflage-clad guards in full military gear, some armed with assault rifles, surrounded Ukrnafta’s headquarters in central Kiev on Sunday.

Mr Kolomoisky said the men were from a private security company summoned by the company’s management, not by him. He also said they did not come from one of the volunteer military battalions that he supports.

But Arsen Avakov, Ukraine’s interior minister, issued a deadline of Tuesday for the men to be removed from Ukrnafta’s premises.

Addressing Ukrainian soldiers in Kiev, Mr Poroshenko said: “We will not have any governor with their own pocket army”.

The head of Ukraine’s state security services earlier said several close associates of Mr Kolomoisky, including two deputy governors of Dnipropetrovsk, figured in an alleged kidnapping and separate murder investigation involving a security officer.

In televised comments, Mr Kolomoisky’s associates denied the claims and accused Mr Poroshenko, himself an oligarch with interests ranging from chocolates to media, of waging a politically motivated attack.

The latest developments fuelled fears that a deepening oligarch showdown could plunge the war-torn country into further instability.

In a challenge to rival oligarchs, Mr Kolomoisky called this month for past privatisations of multi-billion-dollar assets to be reviewed. He alleged they had been rigged, robbing the state of tens of billions of dollars.

But criticism has since mounted within and outside Ukraine’s parliament that Mr Kolomoisky was using the fighting battalions as a “private army” to defend his business interests.Since taking over last year as governor of industrial Dnipropetrovsk, which borders regions partly taken over by Russian-backed separatists, Mr Kolomoisky has won praise in Kiev for supporting the volunteer battalions and taking steps to prevent rebel advances deeper into Ukraine.

Arriving at Ukrnafta’s doorstep late on Sunday, Mr Kolomoisky, who along with other minority shareholders controls the management and cashflows at the company, said the extra security measures were necessary defences introduced by managers in case of a “raider attack”.

Critics, however, have condemned what they describe as hardnosed tactics by Mr Kolomoisky.


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