The state has been robbed of a plant
The state has lost control (at least preliminary) of this country’s largest ore dressing mill. On January 29, a meeting of the Inhulets Ore Dressing Mill’s (IODM’s) shareholders approved the emission of UAH 45 million in stock. As a result, the state-owned stake shrank from 50% +1 share to 38%. This in fact means that the state is now in no position to have any impact on the enterprise. The most important raw-material base for the Ukrainian metallurgical industry has fallen victim to ill- considered privatization with the fullest possible connivance of the State Property Fund and other organizations that are supposed to protect state interests.
The IODM is Ukraine’s largest producer of iron ore concentrate which is consumed by practically all our major steel mills. It should be noted that metallurgy accounts for about 40% of Ukrainian hard- currency earnings and a third of this country’s industrial potential. As control over the IODM has been assumed by the firms that represent Russian capital, this amounts to nothing but a painful blow to Ukraine’s national security.
The January 29 shareholders’ meeting was attended by owners of 62% of the shares. No State Property Fund representatives showed up to celebrate their defeat. But, even in their absence, the function created a spectacular effect. The shareholders approved changes to this joint-stock company’s statute and resolved to replace the registrar. Now, even if the State Property Fund (SPF) wins a court action over what it considers illegal privatization, it will be quite difficult to return the shares to the state. It is beyond any doubt that IODM shares will be closely guarded by offshore companies registered on strange-sounding islands. SPF chairman Mykhailo Chechetov said he would challenge the results of the IODM shareholders’ latest meeting by a legal action. He is contident that he will manage to have the stock emission canceled. This statement sounds too optimistic not only because this instance of shadow privatization was carefully prepared from the legal angle. The point is that when it comes to bribing Themis, a certain Russian oil giant will prove stronger than any Ukrainian government department. On January 28, on the very eve of the IODM shareholders’ meeting, the state-run Ukrrudprom managed, by a sheer miracle, to persuade Kyiv’s Economic Court to ban this meeting. But, on the same day, still more miraculously, Kyiv’s Pechersk District Court ruled, on the basis of the lawsuit filed by an individual who chose not to disclose his identity, that Ukrrudprom and the State Securities Commission should not obstruct the same meeting.
It is beyond doubt that further lawsuits by governmental bodies are doomed to meet the same resistance. This country’s judges are poor, and they tend to view participation in such conflicts as winning the lottery. It is not so easy to say straight away who is responsible for turning Themis into the goddess of arbitrariness. There is a body, the Court Administration of Ukraine, which was supposed to make courts independent of other branches of power. But it turned out in reality that this good idea appealed to neither the executive nor the legislative branch, nor oblast governors. All willingly go to court either by the right of seniority or just by bucking the line — if, of course, they are allowed to do so by those whose wallets call the tune. Even if it is the tune of he former USSR anthem, now in rewritten form that of Russia.
The first victory of Russian capital in the tussle for the IODM is a resounding slap in the face of the Donetsk industrial-financial group’s leaders. It is this group that tried, via its representatives in governmental bodies, to thwart the attempt of shadow privatization. But it turned out that there might be empty cars even in the most heavily loaded trains. Possibly, this is not the end of the story, and the corporate war will continue with hitherto unheard-of weapons employed. Yet, even what we see today is astonishing.
