Is Zelensky seeking a compromise with wanted tycoon Kolomojsky?

Tycoons in Ukraine still are calling the shots. Banker and oil magnate Ihor Kolomojsky, who aired Zelensky's comedy show 'Servant of the People', after 2 years exile returned to Kyiv and seems to prepare a comeback center stage. Under Poroshenko his PrivatBank was nationalised. Now there are signs that the tycoon is protected, says Kyiv-based Christopher Miller in an article on RFE/RL. And Valeria Hontareva, who led the nationalization of PrivatBank, is being attacked and intimidated. How independent is president Zelensky?

kolomojski foto livejournalIhor Kolomojsky (picture Livejournal)

by Christopher Miller

It is usually comic actor-turned-Ukrainian President Volodymyr Zelensky (41) who is in the spotlight, but time and again he is being  upstaged by another Ukrainian - billionaire industrial and media tycoon Ihor Kolomojsky.

Kolomojsky's 1+1 television channel aired Zelensky's comedy shows when he was an actor and supported his presidential bid with glowing wall-to-wall coverage during the campaign. The billionaire returned to Kyiv in May 2019, days ahead of Zelensky's inauguration, after two years in self-imposed exile in Geneva and Tel Aviv.

Kolomojsky had left Ukraine to avoid criminal charges. Under the previous president, Petro Poroshenko, the government had nationalized PrivatBank, which Kolomojsky once co-owned, and accused him of stealing $5.5 billion at a time when the war-torn country was being propped up by the International Monetary Fund (IMF), the United States, and the European Union.

Now he seems to have returned to Ukraine for similar reasons. According to media reports, the FBI is investigating Kolomojsky for alleged financial crimes, including money laundering. Ukraine does not extradite its citizens. Last month, Kolomojsky, 55, was stealing Zelensky's show, with two headline-grabbing appearances in one week. 'He wants to show how great and powerful he is,' Volodymyr Fesenko, a political analyst with the Kyiv-based think tank Penta Center for Political Studies, told RFE/RL.

The attention he is getting, however, has sparked concerns. Critics say Kolomojsky is staging a comeback that threatens to undermine Zelensky's popularity, distract from the new president's agenda, and scare off investors.

The renewed focus on Kolomojsky stems not only from his appearances, but also from a Financial Times report that the tycoon and Ukraine's government are seeking a 'compromise' over PrivatBank, as well as two police raids, two arson attacks, and a hit-and-run targeting PrivatBank and the banker behind its nationalization.

A Meeting With The President

kolomojski en zelenskyMeeting at september 10 between Zelensky and Kolomojsky (foto YouTube)

Eyes turned to Kolomojsky on September 10, when he showed up at Zelensky's office with the presidential chief of staff, Andriy Bohdan, formerly Kolomojsky’s personal lawyer; Prime Minister Oleksiy Honcharuk; and Energy Minister Oleksiy Orzhel. Zelensky's office disclosed the meeting and published a photograph of it on Facebook. The president and Kolomojsky both said PrivatBank was not discussed. Zelensky said he asked Kolomojsky in to talk about investing in the regions of eastern Ukraine that have been ruined by five years of fighting against Russia-backed separatists.

But many observers found that hard to believe and see the tycoon using his purported influence over Zelensky to pursue his private interests, including regaining control of PrivatBank. As evidence, they point to what happened the day after the meeting.

On September 11, police raided the headquarters of PrivatBank as part of a criminal probe into whether bank officials exceeded their authority in concluding agreements with domestic and international recruitment and consulting companies. In a statement, the bank said it operates within the law and called the search, which included heavily armed special forces, 'worrying'. 'The search in the office of PrivatBank immediately after the meeting between Kolomojsky and Zelensky is really alarming,' Fesenko said.

'The Belle Of The Ball'

Two days later, Kolomojsky made a surprise appearance at the Yalta European Strategy (YES) meeting, an annual gathering of Ukraine's political elite and Western experts in Kyiv. Standing in the center of a swarm of reporters and posing for photographs with attendees, he appeared confident and comfortable. Special guests at the forum included high-profile American film stars Mila Kunis and Robin Wright. Yet it was Kolomoyskiy whom its organizer, fellow billionaire tycoon Viktor Pinchuk, called 'the most sought-after guest'. A senior Western diplomat at the event put it another way. 'He's the belle of the ball,' he said of Kolomojsky.

zelensky at yes meeting picture pres adminZelensky at YES-meeting in Kyiv (picture presidential administration)

The tycoon told reporters during more than three hours of questioning that he hopes to find 'an amicable settlement' on the PrivatBank issue and that he sees a 'window of opportunity' now to do so. The comments worried analysts and investors. Their concern grew when, days later, the Financial Times published an interview with Honcharuk in which he said the government was seeking a 'compromise' with Kolomojsky. After public criticism, Honcharuk tried to roll back his statement, and his press team claimed his words were taken out of context.

But that did little to assuage the fears of experts who find the possibility of a compromise with Kolomojsky over PrivatBank disturbing. 'Now the president has enormous power and a huge responsibility,' Serhiy Fursa, a specialist of sales of debt securities at the Dragon Capital investment group, wrote in a sharp-tongued op-ed for the Liga news site. 'And in this case, his responsibility is not to make a deal with the devil.'

Fursa said that a clear sign of where Zelensky stands on the PrivatBank issue will come with the decision of a Kyiv appeals court soon. In April, a court in Kyiv ruled the nationalization of the bank illegal. The central bank is appealing against the decision. 'If the court of appeals recognizes the nationalization as illegal, then this will mean that the Ukrainian president decided to compromise with Kolomojsky,' Fursa said.

A Campaign Of Intimidation

The Zelensky meeting, Kolomojsky's swagger, and news of a potential deal with the government are only part of the growing public concern over recent events in Kyiv. Amid everything, the home of the former governor of the National Bank of Ukraine, Valeria Hontareva, who led the nationalization of PrivatBank, was raided by police.

Hontareva, now a fellow at the London School of Economics, has lived in the United Kingdom since leaving her position at the central bank. She has not returned to Kyiv since, despite requests by authorities to appear for questioning related to abuse of office allegations. She told RFE/RL by phone on September 17 that she fears being attacked in Kyiv, and that even abroad she is concerned for her safety. And she has reason to be.

As central bank governor, she made many enemies while cleaning up Ukraine's financial sector. Her work brought death threats. During one protest outside the central bank, demonstrators laid out a coffin holding a mock corpse with her face on it. She resigned after that and went to London. But the threats kept coming, she told RFE/RL. And then came a string of disturbing and violent incidents.

On August 26, a car ran over her at a pedestrian crossing in London, badly injuring her legs. On September 5, a car belonging to Hontareva's daughter-in-law, who shares her name, was torched in Kyiv. On September 12, one day after the police raid at PrivatBank and two days after Kolomojsky's meeting with Zelensky, one of her homes in Kyiv was raided by police. Then, on September 17, in what she called an act of 'terror', an unknown assailant leaped the fence of her cottage outside Kyiv and burned it to the ground.

Hontareva said she is unsure whether the incident in London was an accident or a deliberate attack. But the others, she claims, are part of a campaign of intimidation orchestrated by Kolomojsky.

Zelensky condemned the arson and called for a thorough investigation. 'The police have refrained from naming suspects [in the home fire], but public opinion is that Kolomoyskiy is the main suspect,' Fesenko said. 'He himself does not hide his vengeful attitude toward Hontareva.' For his part, Kolomojsky denied being behind any intimidation campaign against Hontareva, including the arson attacks on her home and her daughter-in-law's car.

He also denied involvement in the car accident in London, saying he offered to return her to Kyiv another way.

This article was originally published by RFE/RL

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