NewsThe fall of the oligarch. The president might take over his empire

The fall of the oligarch. The president might take over his empire

The fall of the oligarch. The president might take over his empire
Images source: © GETTY | Global Images Ukraine
ed. KRO
9:53 AM EDT, October 12, 2023

The status is falling and Ihor Kolomoyskyi's empire is crumbling. Ukrainian services accuse him of embezzling money from the country's largest bank. This is the first case in Ukraine's history where an oligarch of this magnitude has ended up in custody. This opens up a gateway for Volodymyr Zelensky to take control of his media.

The fall of the Ukrainian oligarch is described by analysts at the Center for Eastern Studies, Jakub Ber and Piotr Żochowski, in collaboration with Tadeusz Iwański. As we read, in September Ihor Kolomoyskyi faced a number of allegations related to the embezzlement of funds from the largest Ukrainian bank - Pryvatbank. The assets of this institution constitute almost one-third of the entire national banking sector.

Oligarch in jail

On September 2, the Security Service of Ukraine (SBU) and the Economic Security Office (ESO) accused him of leading a criminal group, which from 2013-2016 was involved in withdrawing money from the aforementioned bank. This came as a surprise, as the oligarch had been targeted by the National Anti-Corruption Bureau of Ukraine (NABU), which had been conducting an investigation into this case for years. It was expected that NABU would be the first to bring charges.

The body finally did it on September 7. At that time, Ihor Kolomoyskyi was already in the SBU detention center. Eight days later, the SBU and BEB brought additional charges against him related to participating in another scheme to withdraw money from Privatbank. The court, in turn, raised the bail allowing him to leave prison to nearly 4 billion hryvnia (over 100 million dollars).

The arrest of Kolomoisky is an unprecedented event in the history of Ukraine. Until now, none of the oligarchs of such importance, who for years had a powerful influence on the political and economic life of Ukraine and who were repeatedly accused of serious economic crimes, were arrested, even for the duration of the investigation. This means the fall of Kolomoisky as a political player and probably signifies the beginning of the end of his business empire - write OSW analysts.

Former boss of Zelensky

Back in 2019, the star of Ihor Kolomoyskyi shone incredibly brightly. In Ukraine, he was talked about as the patron of Volodymyr Zelensky, who unexpectedly won the presidential election. The oligarch openly supported the candidate, who was known as an actor and comedian before his political career.

However, the situation began to change over time. In the summer of 2021, the president ramped up Ukraine's de-oligarchization campaign, and its symbolic start could be considered the so-called law on oligarchs. Analysts assume that the decision to arrest was undoubtedly sanctioned by Volodymyr Zelensky himself.

This decision, indeed, came in a difficult moment for a country engulfed in war, which is also plagued by corruption. The aftermath of this is the dismissal of the National Defense Minister, Oleksiy Reznikov. The politician paid for his position due to corruption scandals related to the rear institutions of the Ukrainian army.

A country riddled with corruption

Journalists and activists also level accusations against the close associates of the president, which primarily include the head of the President's Office, Andriy Yermak, and one of his deputies, Oleh Tatarov. They accuse them of excessive concentration of power, manual controlling of special services, and unclear business ties.

However, Sam Wołodymyr Zełenski is trying to put an end to rumors about his secret connections with the oligarchy. The battle with the magnates who have an influence on the country's economy also has a different background.

Ukraine is in this way trying to show Western countries that it strives to eliminate financial abuses, as well as that it is fighting against corruption and the oligarchization of the economy. "This is also important in the context of Western expectations that sentences will be passed in corruption cases at the highest levels" - we read in the analysis.

Who will take over the legacy?

The star of Ihor Kolomoisky seems to be fading, and he himself has gone from being the savior of the country to a pariah in just under a "decade". As recently as 2014, he had the image of a hero who saved the Dnipropetrovsk region from Russian aggression. Eight years later, however, his image crumbled when he did not condemn the Russian invasion, and finally in 2023, he ended up in jail.

The question remains, who will now take control of his business empire. The nationalization of Privatbank was a serious blow. The loss of some industrial assets due to war should also be added to this. The oligarch still owns, among other things, steel plants and the 1+1 television station. However, the presidential center currently supervises the latter as part of a round-the-clock news program (so-called telethon).

There is also an open question about the fate of Kolomoisky's assets, primarily the popular 1+1 station. So far in Ukrainian history, there has not been a president who did not seek to take control of television for the purpose of using it in an election campaign - write OSW analysts.

The future of the For the Future party, which was controlled by the oligarch, is also unclear. Formally, it has a group of several members in the Supreme Council of Ukraine and some influence in local governments. Even if its politicians remain loyal to Ihor Kolomoyskyi, they will likely not protect him from criminal liability.

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