An old song to a new tune

These days it has been interesting to observe the media reacting to the material published on the website obozrevatel.com. A sensation would seem sure. Though, even the headline reading “Criminal and sexual intrigue of the Ukrainian business revealed in the High Court of England” did not result in the informational hype that would be provoked in the right coordinates. However, the scandal is gradually heating up. Even Ukrainska Pravda had to publish a notice: “Kolomoisky claims that he transferred money to Pinchuk for Kuchma’s presidential campaign.”

Such news about mutual counts of the 1990s takes us back to that time. Until we eliminate the explosive legacy of Leonid Kuchma’s occupation of the presidency, we will hear its echo in the old-new showdowns. We need the new agenda and the new rules of the game.

“Pinchuk’s process against Kolomoisky and Boholiubov in London will provoke a grandiose scandal in Ukraine” was the headline of another article published by Obozrevatel on October 11. This prediction is coming true…

In its article of May 21, 2013 called “Mutual counts of privatization of the 1990s are heading into the homestretch…” Den informed its readers that in March 2013 the businessman Viktor Pinchuk sued Ihor Kolomoisky and his business partner Hennadii Boholiubov to the court claiming that they owed him the money for the stocks of the extractive enterprise Kryvorizky Iron Ore Factory. The agreement was supposedly signed in the period between 2004 and September 4, 2006. Pinchuk claims that he paid Kolomoisky and Boholiubov in cash, however, they kept the stocks of the factory and then resold them to another Ukrainian oligarch Rinat Akhmetov. The bill of complaint reads: “Mr. Pinchuk duly paid the whole sum of 143 million dollars but did not receive the stocks.”

In this text published by Den our colleague Bohdan TSIUPYN, who is currently living and working in London, conceded: “If this case is heard in the court, the evidence of privatization processes in Ukraine and other former Soviet republics might pop up. Probably, it will be clear how some people became incredibly rich within a very short period of time.” Actually, this is what brings zest to this law suit.

The London Court received the documents with the information that has been known in Ukraine for a long time now. However, not any Ukrainian court had such an evidentiary basis as the London High Court of Justice received. Obozrevatel emphasized that these materials contain the facts the Ukrainian Prosecutor General’s Office just cannot ignore, for example, Kolomoisky’s phrase quoted by the abovementioned website in the article “What does Pinchuk require from Kolomoisky? Respondent’s plea”: “The complainant repeatedly used his relations with the president Kuchma in his influence on the Ukrainian state assets as a form of power to achieve his private financial and commercial goals.”

The next quote is yet more interesting: “Kuchma’s regime differed by corrupt practices, nepotism and relations with organized crime. During Kuchma’s presidential term the complainant could influence the Ukrainian authorities of the highest level due to his relationship with the then president. For example, approximately in 2004 this influence enabled the consortium, in which the complainant had a significant part, to purchase the biggest Ukrainian steel making plant Kryvorizhstal for only 800 million dollars. After Kuchma’s presidential term had been finished, the privatization was cancelled by the Ukrainian courts and after that Kryvorizhstal was sold to Mittal Steel Company for nearly 4.81 billion dollars in October 2005,” as claimed by the respondent in the case papers. By the way, the text of the lawsuit and the respondents’ pleas (Kolomoisky and Boholiubov are willing to defend themselves separately in the London Court) are in the open access on the web-portal of Obozrevatel.

Here is another interesting detail about purchasing Nikopolsky Ferroalloy Plant (NFZ) from the case papers published by Obozrevatel: “With the decree of the Cabinet of Ministers of Ukraine of December 25, 2002, two months after the wedding of complainant (Viktor Pinchuk) and the President Kuchma’s daughter, the Ukrainian government removed the three-year moratorium for further privatization of NFZ, imposed in October 2001. In February 2003 the government announced the tender for 25 percent of NFZ stock capital basing on which the successful tenderer would have a prerogative right to buy the rest of 25 percent plus one stock which belonged to the State Property Fund of Ukraine. The conditions of the tender were created to enable only one company to be qualified as a tenderer: Industrial-Financial Consortium Prydnistrovia (PFK), registered according to the Ukrainian legislation and whose beneficial owner was the complainant or it was controlled by him. It is no wonder that at the end of the day PFK was a successful tenderer and in May 2003 this company bought 25 percent of NFZ stock for 38.4 million dollars. In August 2003 PFK used its prerogative right to buy the other 25 percent plus one action for 38.5 million dollars.”

There are a lot of interesting facts…

The London court will pass a verdict and we would like to believe a fair one. But how will the Ukrainian judiciary react to it? Obviously, it is time to decide what we should do with the heritage of the 1990s. Turn the page over and finish off with that practice that, unfortunately, has become normal.

Ukraine had other chances. The fact that our country missed them is the problem of those who did their best to convince us that the way of crony capitalism was the only possible way for Ukraine at that time. It also concerns those who silently agreed with that. The lost time is never found again. All we can do now is learn from the mistakes we made. We should learn from our mistakes not to make them again. Learn in order not to deal with the legacy of the 2010s in 2033. However, now, taking into account how carefully the Ukrainian media are covering the judicial proceedings in London and how the case materials are taken by the Ukrainian law-enforcement bodies, it looks exactly like this.