UKRAINE'S OLIGARCHS: They have Billions To Lose

Introduction in case you didn't know - Ukraine’s richest people hold billions of dollars in assets that are now at risk of Russian attack, stretching from the capital of Kyiv to the country’s east near the separatist-held enclaves of Donetsk and Luhansk.

 "Ukraine’s oligarchs have put aside both their differences with the government of Volodymyr Zelensky and any lingering pro-Russian sentiment to close ranks with the authorities in Kyiv.

“There was a huge meeting of Ukrainian tycoons with President Zelensky [on February 23]. They all declared their readiness to help,” Berezovets said. That support ranges from funding the Ukrainian military to using their vast industrial assets to produce weapons.

As tensions with Russia soared earlier this month, the billionaire former President Petro Poroshenko returned home to help his country. He and Zelensky suspended their long-running battle, which included criminal charges against Poroshenko, and met on Tuesday, when Poroshenko presented a plan to strengthen Ukraine’s defense capabilities, including its air and missile defenses. A bill reportedly proposed by Poroshenko six weeks earlier to increase funding for the Ukrainian army was passed by parliament on Tuesday.

“Ukraine is in danger, and when [the] country is in danger, Ukrainians have always united,” he told Espresso TV before the meeting with Zelensky. The aim of the plan was to “significantly increase the price Putin will pay if he decides to continue to invade Ukraine,” he said.

Richest Ukrainians With Billions To Lose Close Ranks As Putin Unleashes War

(Daily Cover|Feb 24, 2022,08:35am EST)

 

Giacomo Tognini Forbes Staff Writer, Wealth Team.

Forbes | 2022-02-24

Amid reports of attacks against Ukrainian cities and Russian troops entering the country, Ukraine’s billionaires are putting aside their differences and lending their support to the government in Kyiv.

It was just last week that Ukrainian billionaires Rinat Akhmetov and Vadim Novinsky traveled to the frontline city of Mariupol to tell Metinvest Group mining and steel-making employees they were getting bumps in pay.

“We believe in Mariupol, we believe in Ukraine,” said Akhmetov, the country’s richest person, whose holdings include the mining conglomerate headquartered there. “We’ll continue working, we’ll continue building, we’ll continue investing.”

Mariupol was under heavy shelling Thursday as Russian President Vladimir Putin ordered an attack on Ukraine. Putin had previously telegraphed his interest in Mariupol, a port city home to nearly half a million people, after Russian troops invaded eastern Ukraine’s separatist regions, Donetsk and Luhansk. Mariupol sits on the Sea of Azov, inside the larger borders claimed by the self-declared Donetsk People’s Republic.

Much of the world’s focus has been on the Russian oligarchs and their potential losses due to international sanctions. Already, on Thursday, Russian stocks have plummeted. But Ukraine’s half-dozen or so billionaires have as much and likely more to lose from armed conflict. According to Forbes Ukraine, the value of any assets held in the separatist-held regions of Donetsk and Luhansk had likely tumbled by as much as 40% in the days leading up to the attack, while holdings elsewhere in the country had lost at least 20%. By Thursday, the situation was much more dire.

While some Ukrainian billionaires initially fled the country, they returned in recent days to show their support. “They realized that Putin presents a clear threat to all of Ukraine, and their assets as well,” said Taras Berezovets, a Ukrainian political analyst and TV host. “He doesn’t care about Ukrainian oligarchs or to what extent they have been loyal to him. Everybody understands that any Ukrainian now, including tycoons, are enemies of Putin's regime.”

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Here’s a roundup of how Ukraine’s billionaires have reacted to Russia’s recent actions and how much they stand to lose in the war.

> The most pro-Russian of Ukraine’s oligarchs, Novinsky presented a draft resolution to the Ukrainian parliament on February 21 that proposed negotiations with members of Russia’s parliament to de-escalate the crisis and guarantee a sustainable peace between Russia and Ukraine.

The resolution proposed formulating a common position to prevent further escalation and reduce military tensions, including the establishment of a representative group of Russian and Ukrainian legislators. It also called for Ukraine to work with its international partners and urge them to return their diplomats to Kyiv. The U.S., the U.K., Germany and several other Western countries temporarily relocated their embassies to Lviv, a city near the western border with Poland, over the past week.

As recently as late January, Novinsky had cast doubts on the prospect of a Russian takeover of Ukraine, including the veracity of a British intelligence report that cited a potential Russian coup that would replace Ukraine’s elected authorities with a government led by pro-Russia lawmaker Yevhen Murayev. In an interview with the Financial Times, Novinsky called those reports “complete nonsense,” adding that “the only way there’s going to be a puppet government is if there’s an invasion.”

> One of Ukraine’s most pro-Western billionaires, Pinchuk is a fixture at the World Economic Forum at Davos, where he is known for hosting annual breakfasts focused on Ukraine. He also owns a large art collection and significant real estate in the West, including homes in London and Sardinia. “Pinchuk has been organizing these big international conferences in Ukraine and hosting very high-profile guests from Europe and the U.S.,” said Harvard’s Channell-Justice.

> One of the first oligarchs to push Ukraine in a pro-European direction, Kolomoyskyy—an oil baron who first made his fortune in banking—reportedly spent millions funding and equipping volunteer military battalions to help stop Russian troops in 2014. He also agreed to become governor of his native Dnipro region, serving in the role from March 2014 until March 2015, when he was fired by Ukraine’s then-president, fellow billionaire Petro Poroshenko. Once seen as one of the most powerful figures in the nation, he’s since been drawn into court cases in Ukraine, the U.S. and the U.K. over allegations of corruption while he was governor of Dnipro, as well as financial misconduct at PrivatBank, Ukraine’s largest bank, which he cofounded in the 1990s with fellow billionaire Henadiy Boholyubov. “He’s sort of a persona non grata [in the West] at this point,” said Harvard’s Channell-Justice.

Formerly a close ally of Ukraine’s president Volodymyr Zelensky—the comedian-turned-politician starred in a TV show called “Servant of the People” that ran on Kolomoyskyy’s TV network—the relationship has soured of late. In September, the Zelensky government passed a “de-oligarchization” law aimed at reducing the economic power of Ukraine’s richest people, and Kolomoyskyy was included on a list of oligarchs. (The list also included Akhmetov, Pinchuk, Poroshenko and another Ukrainian billionaire, Kostyantin Zhevago.)

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Known as the “chocolate king” for founding Roshen, Ukraine’s largest confectionery group, Poroshenko was elected president in May 2014, two months after Russia annexed Crimea. He emerged as one of Russia’s fiercest critics and built closer ties with the West, signing a long-delayed association agreement with the European Union a month after taking office.

In 2019, he lost his bid for reelection in a landslide to Zelensky. In 2020, Ukrainian prosecutors opened more than 20 criminal cases against Poroshenko, alleging an array of charges ranging from treason to “usurping power.” He rejected the charges, calling them “purely political.” In December 2021, he was charged with high treason and aiding terrorist organizations for allegedly financing the Russan-backed separatists in Donetsk and Luhansk. Calling the decision politically motivated, Poroshenko fled the country for Poland, before returning a month later. Two days after his return, on January 19, a court declined to arrest him and allowed him to remain free, pending trial, without posting bail.

But the feud is now on hold after Poroshenko met Zelensky on Tuesday to discuss his plan to boost Ukraine’s military readiness and increase the defenses around Kyiv. He also stated his support for Ukraine’s future membership of NATO and emphasized that Russia poses a threat to the entire world, not just Ukraine.

Other Billionaires

The other Ukrainian billionaires tracked by Forbes haven’t publicly spoken out about Russia’s invasion so far. Mining billionaire Kostyantin Zhevago, who was named in Zelensky’s de-oligarchization bill, served in Ukraine’s parliament from 1998 to 2019, most recently as an independent and previously as a member of a pro-European party led by former Prime Minister Yulia Tymoshenko. Despite his past political involvement, Zhevago hasn’t spoken out about the current situation. Neither has Henadiy Boholyubov, Ihor Kolomoyskyy’s former business partner.

Three other Ukrainian-born billionaires based outside the country—Vlad Yatsenko, founder of U.K.-based fintech Revolut, and Alex Shevchenko and Max Lytvyn, cofounders of grammar checking tool Grammarly—have also yet to comment on the events in their birth country. Yatsenko lives in London, while Lytvyn and Shevchenko are both Canadian citizens. A spokesperson for Grammarly did not immediately respond to a request for comment. . .

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