BREAKING INTERNATIONAL NEWS: Ukrainian Oligarch Who Backed Zelenskyy Named as a Suspect in Fraud Probe
Ukraine tycoon Ihor Kolomoisky taken into custody over fraud allegations
Court places billionaire businessman under arrest for two months over fraud and money laundering charges.
Kolomoisky is a former owner of leading Ukrainian bank PrivatBank, which was nationalised in late 2016 as part of a major cleanup of the banking system [Vladyslav Musiienko/Reuters]
Published On 2 Sep 20232 Sep 2023
A Ukrainian court has placed billionaire businessman Ihor Kolomoisky under arrest for two months over fraud and money laundering charges as part of the war-torn country’s crackdown on corruption. The court on Saturday gave Kolomoisky the option of posting bail of more than 509 million hryvnias, equivalent to more than $13m.
In an oblique reference to legal proceedings against the business magnate, President Volodymyr Zelenskyy on Saturday thanked law enforcement bodies for bringing long-running cases to justice.
“I thank Ukrainian law enforcement officials for their resolve in bringing to a just outcome each and every one of the cases that have been hindered for decades,” Zelenskyy said in his nightly video address.
Al Jazeera Rob McBride, reporting from Kyiv, said the court’s decision has caught many people by surprise.
“This has come as a big shock here in Kyiv. There’s been rumblings of it on social media all day. Kolomoisky is one of Ukraine’s most high-profile, richest oligarchs in the country.
He was a supporter of Volodymyr Zelenskyy’s presidential bid back in 2019. He has been under US sanctions since 2021,” McBride said.
“This comes amid a campaign by the Ukrainian government to tackle corruption and to be seen to be tackling corruption. There is a prevailing mood in the country at the moment that the government is tackling corruption. A number of officials have been dismissed and also been prosecuted,” he added.
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Early on Saturday, Ukraine’s main security agency, the Security Service of Ukraine (SBU), named Kolomoisky as a suspect in a criminal investigation.
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“It was established that during 2013-2020, Ihor Kolomoisky legalised more than half a billion hryvnias [$14m] by withdrawing them abroad and using the infrastructure of banks under [his] control,” the SBU said in a statement. Kolomoisky, who has previously denied allegations of wrongdoing, could not be reached for comment.
The SBU published pictures on the Telegram messaging app of a group of detectives at the door of his home, Kolomoisky being served documents and signing them.
The businessman is seen as one of the class of oligarchs who amassed huge industrial wealth after the 1991 collapse of the Soviet Union and who have wielded outsize political and economic influence.
Before Russia’s invasion of Ukraine in February last year, Zelenskyy and his team tried to clip their wings with legislation requiring oligarchs to register and stay out of politics.
The war has eroded their power as lucrative industrial assets have been destroyed in the east and south, and their television channels have been broadcasting under a centralised wartime signal.
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Before he won the presidency, Zelenskyy rose to prominence as a comedian and played the role of president on a show aired on a Kolomoisky-owned TV channel.
He denies Kolomoisky has had any influence over his government.
12 hours ago — Kolomoisky, one of Ukraine's billionaire oligarchs, is the most prominent figure to have become a target. Zelenskyy is moving to equate wartime ...
11 hours ago — A Ukrainian court has placed billionaire businessman Ihor Kolomoisky under arrest for two months over fraud and money laundering charges as ...
Feb 1, 2023 — Ihor Kolomoisky held shares in two oil companies, Ukrnafta and ... Many also questioned whether Zelenskyy would act against Kolomoisky after ...
Jul 10, 2021 — So far, the only time Zelenskyy has really acted against Kolomoisky's interests was when Ukraine's Western creditors insisted on the passage of ...
Jun 29, 2023 — Ihor Kolomoisky returned to Ukraine in 2019 after two years of forced exile. He spared no effort and airtime on “pros” to support Volodymyr ...
Feb 1, 2023 — Ihor Kolomoisky is credited with helping Volodymyr Zelensky to power, but the Ukrainian president denies being supported by the media tycoon.
Zelensky's Ukraine: Why comic's dream of transformation may be over
Published
What happened to the 'Dreamteam'?
IMAGE SOURCE,FACEBOOK/VOLODYMYR ZELENSKY
Image caption,
Volodymyr Zelensky (second from R) and his "Dreamteam" in France
The picture above came at the peak of Zelensky-mania. Taken in Paris in April 2019 between the first and second round of Ukraine's election it shows the soon-to-be president on his way to the Elysée Palace to meet President Emmanuel Macron.
Even if he didn't have a clue, he would be surrounded by others who did.
On the far left of the picture is Alex Danylyuk. A former finance minister, he's credited with helping clean up Ukraine's banking sector.
Mr Danylyuk was at Mr Zelensky's side throughout the later stages of the election campaign and after the vote given a powerful job in charge of national security.
The next man across - the man with the stubble - is Rouslan Riaboshapka. His background is in law and fighting corruption. He was handed the job of prosecutor general, perhaps the most important of all the roles beneath the president.
Ukrainian presidents have consistently used the prosecutor general and his office as a tool to pursue their enemies and to reward their friends: cutting corrupt deals with oligarchs in return for favourable TV coverage or a share of ill-gotten gains. It was the rotten heart of a rotten political system.
Mr Riaboshapka promised to be independent and different. He immediately embarked on an ambitious attempt to clean up the prosecutor's office.
The appointment of Mr Riaboshapka, Mr Danylyuk and several other well-respected reformers was seen by Ukraine observers, both at home and abroad, as a clear sign that President Zelensky intended to try to deliver of his ambitious promises.
You've probably guessed it by now, but the Dreamteam didn't last long. Alex Danylyuk stayed four months; Rouslan Riaboshapka seven.
I met up with Alex Danylyuk in Kyiv this week. He resigned from Mr Zelensky's team in September last year after falling out with the president's chief of staff (also now departed).
Mr Danylyuk told me he had no regrets about backing the former comedian and doesn't doubt his good intentions or desire to change things.
So what went wrong?
"He (Zelensky) surrounded himself with very weak, opportunistic people," Mr Danylyuk says. "The comedian brought with him incompetent people who now run major government institutions."
A reshuffle at the start of March saw almost all recognised reformers purged from office, among them Mr Danylyuk's fellow "Dreamteamer", Rouslan Riaboshapka.
He's now in France so I caught up with him via Skype and his assessment of what's taken place is bleak.
Mr Riaboshapka tells me he had "big fish" in his prosecutorial sight, meaning Ukraine's rich oligarchs, but that after initially backing far reaching reforms and de-oligarchisation President Zelensky dramatically lost his nerve.
"Instead of choosing to fight the oligarchs," Mr Riaboshapka tells me with a sigh, "he chose peace and consensus with them."
IMAGE SOURCE,GETTY IMAGES
Image caption,
Ivan Bakanov was given the task of running Ukraine's SBU state security agency
On the right of the photo in Paris is Ivan Bakanov. He's rather different from the other "Dreamteamers". No-one describes him as a reformer.
Mr Bakanov is from the same southern Ukrainian town as Mr Zelensky and a childhood friend.
He used to run Mr Zelensky's TV production company.
Eyebrows were raised when Mr Bakanov was given the plum job of head of Ukraine's state security agency the SBU.
A year on and he's one of the few members of the Zelensky administration to still hold the same job.
Media caption,
There were joyful scenes in December when Ukrainian prisoners flew back to Kyiv
President Zelensky has packed a lot into the first year and there are four to go.
Plenty of people, particularly in Kyiv, will tell you that it's heading towards inevitable disaster; that history will repeat itself and it will all end with street demonstrations.
But for now the wider public still appear to back their unlikely leader. Despite the setbacks, many still see President Zelensky as Ukraine's best chance for change.
Seasoned Ukraine watchers raised a sceptical eyebrow two years ago when Volodymyr Zelenskyy swept to a landslide victory in the country’s presidential election. Despite pitching himself as the ultimate outsider intent on breaking the power of the country’s corrupt oligarchic elite, Zelenskyy’s campaign depended heavily on the backing of Ihor Kolomoisky, arguably Ukraine’s most controversial oligarch of all. During the campaign, Zelenskyy appointed Kolomoisky’s personal lawyer as a key adviser, travelled abroad to confer with the then-exiled Kolomoisky on multiple occasions, and benefited from the enthusiastic endorsement of Kolomoisky’s media empire. Unsurprisingly, many viewed Zelenskyy as Kolomoisky’s candidate. Not much has happened in the two years since to force a change in that assessment, even as Zelenskyy revives his commitment to “deoligarchisation” in a bid to boost his flagging popularity. Kolomoisky was put on the US sanctions list earlier this year over allegations of corruption but remains apparently untouchable at home. He has not yet regained control of Privatbank, nationalised in 2016 after alleged fraud left USD 5.5 billion missing from its balance sheet. But nor has Zelenskyy succeeded in recovering those assets, as demanded by the IMF. Meanwhile, government officials deemed a threat to Kolomoisky’s interests have been removed from their posts, including the Prosecutor General, Ruslan Ryaboshapka, who was pursuing an investigation of the oligarch, and the Governor of the National Bank of Ukraine (NBU), Yakiv Smolii. Zelenskyy’s first prime minister, Oleksiy Honcharuk, became another casualty after he tried to loosen Kolomoisky’s control of a state-owned electricity company. Hints of the president’s continued personal connections to the oligarch were highlighted again in February 2021 when Zelenskyy breached Covid lockdown restrictions to celebrate his birthday at a private party hosted at the home of Kolomoisky associate Timur Mindich.
There are plenty of people, some with close experience of Mr Zelensky who have their doubts about the methodology, whether it will actually work.
Oleksandr Danylyuk was a key member of the Zelensky 2019 campaign team and his first national security chief:
"This is just PR. Going against oligarchs looks good for him. People like a president who's decisive and going after oligarchs and bandits."
A former minister of finance, Mr Danylyuk, says that any measures against the oligarchs' businesses will also damage Ukraine's economy.
He's scathing in his assessment of President Zelensky's ability to deliver.
"He won't be successful because he doesn't know what he's doing,"says Mr Danylyuk. "He only knows how to destroy. He doesn't know how to build."
President Zelensky is known to monitor his public popularity closely and some doubt whether he can withstand what is certain to be a barrage of criticism from the TV channels that the oligarchs own and control.
But he is, at least in part, following an example set by Vladimir Putinwho demanded early on his presidency that the country's billionaires either back him or surrender their wealth.
"Putin obviously made examples of a few oligarchs, like [Mikhail] Khodorkovsky and [Boris] Berezovsky, and the rest quickly fell into line." says Timothy Ash.
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