Ukrainian oligarch Ihor Kolomoisky under pressure in criminal cases

KYIV — Ihor Kolomoisky once owned Ukraine’s richest bank, a TV station that carried a popular show starring a comedian named Volodymyr Zelensky, and fielded a private militia to defend his home city of Dnipro when it was under threat from Russian-backed separatists in 2014.

Today, he sits behind bars, awaiting the outcome of two investigations and at risk of losing everything.

Ukrainian anti-corruption authorities have opened a series of cases against Kolomoisky in the last two weeks — the most recent on Friday, as the Security Service of Ukraine, or SBU, said it was investigating him for allegedly embezzling some $160 million.

The news came to Kolomoisky as he sat in a pretrial detention center in Kyiv. Last week, the SBU said in a statement that it was investigating him for fraud and laundering more than $14 million between 2013 and 2020. Though he has not yet been indicted, the Ukrainian legal system allows a suspect to be detained while an investigation proceeds.

Kolomoisky, who is believed to hold Israeli and Cypriot passports, has declined to post a $14 million bail, protesting that the case against him is illegal.

Since Russia’s invasion in February 2022, Ukraine’s oligarchs have seen their influence greatly curtailed, as officials have introduced laws aimed at diminishing their political and economic reach. In Russian-occupied territory, their assets have been expropriated or completely destroyed during the fighting.

But arguably no one has fallen as far as Kolomoisky, an oil, banking and media mogul who was once valued at $2 billion, and who was considered a close supporter with major influence on Zelensky, the comedian-turned-president. Zelensky starred in a number of shows on Kolomoisky’s television channel, including as an unlikely president in “Servant of the People.”

In 2019, Kolomoisky helped Zelensky win the real job, thwarting Petro Poroshenko’s bid for a second term. Kolomoisky and Poroshenko, also an oligarch, had clashed fiercely.

Kolomoisky has been under legal pressure since 2016 when officials discovered some $5.5 billion missing from PrivatBank’s balance sheet, which they accused Kolomoisky, his business partner, Hennadiy Boholiubov, and other top deputies of embezzling.

Shuffle of Russian military chiefs preceded death of Wagner boss Prigozhin

The apparent asset stripping at the country’s largest retail bank left some 20 million ordinary citizens at risk of losing their life’s savings. The government seized the bank and nationalized it, then launched legal cases to claw back the allegedly stolen money.

Zelensky’s election has not helped Kolomoisky and the perception that he is close to the president may have raised pressure on government authorities to hold the oligarch to account. In July 2022, officials in Kyiv told Ukrainian media that Kolomoisky had been stripped of his Ukrainian citizenship for violating a law prohibiting dual nationality. Kolomoisky denied this happened.

Last week, officials at the country’s National Anti-Corruption Bureau, or NABU, said that they were also opening an official investigation of a “former ultimate beneficial owner” at PrivatBank and five associates on suspicion of embezzling some $250 million. Ukrainian media identified the former owner as Kolomoisky.

Kolomoisky was once widely regarded to be untouchable legally, given his connections and immense wealth. He was also one of the more flamboyant tycoons to emerge from Ukraine’s first cutthroat decades of independence: a large man, with a shock of curly hair and bushy beard, who earlier kept a shark aquarium in his offices.

But his days as a larger-than-life billionaire operating above the law may now be drawing to a close.

“I consider this the end of his era,” said Borys Filatov, the mayor of Dnipro, a former business partner and political ally of Kolomoisky, who has since fallen out with him.

Last week, when the first case against Kolomoisky for fraud and money laundering was announced, the SBU posted photos on its Telegram channel showing him surrounded by agents at his home, signing documents.

Later that day, Kolomoisky appeared in a Kyiv court for his arraignment and was jailed for two months. Ukrainian media showed him in a blue track jacket and dark pants, being driven away to a pretrial detention center.

If convicted, Kolomoisky faces up to 12 years in prison, NABU said.

Filatov, the Dnipro mayor, said that NABU investigators “worked very, very fruitfully for several years” on Kolomoisky’s case. “And that’s why I believe that, now after the accusations from NABU have been presented, he has gone to jail for a very long time,” he said.

Kolomoisky has flatly denied all of the allegations.

In 2017, a London court ordered a worldwide freeze of some $2.5 billion of his and his partner Boholiubov’s assets in connection with the PrivatBank case.

Russia ramps up drone, guided bomb attacks to thwart counteroffensive

And starting in 2020, the U.S. Justice Department filed civil forfeiture cases against the two men over properties they owned in Florida, Texas and Ohio, which it said had been “acquired using funds misappropriated from PrivatBank.”

Then in 2021, the United States imposed sanctions against Kolomoisky and members of his family under a U.S. law that allows penalizing foreign officials involved in human rights violations and corruption. Secretary of State Antony Blinken said Kolomoisky was “involved in corrupt acts that undermined rule of law and the Ukrainian public’s faith in their government’s democratic institutions and public processes” while serving as governor of Dnipropetrovsk region.

After Russia initially invaded Ukraine in 2014, acting president Oleksandr Turchynov appointed Kolomoisky as governor of his native Dnipropetrovsk region. It was then that Kolomoisky financed a private army to fight Russian-backed separatists and called Russian President Vladimir Putin a “schizophrenic of short stature.”

Poroshenko dismissed him from the governor’s post in 2015, after Kolomoisky clashed with Kyiv over Ukrnafta, a state-owned oil company in which Kolomoisky held a minority stake.

Following the nationalization of PrivatBank, Kolomoisky fled the country for his homes in Switzerland and Israel.

Kolomoisky denies that the bank’s money was stolen and has filed dozens of lawsuits to win back control. However, in 2020, Ukraine’s parliament passed a law forbidding the government from reversing nationalizations. And in July 2022, Ukraine’s Supreme Court upheld the seizure of the bank.

Kolomoisky returned to Ukraine from Israel following Zelensky’s election, only to see more of his businesses come under pressure. In November last year, Ukraine’s government nationalized the assets of Ukrnafta and Ukrtatnafta, an oil refinery in which Kolomoisky and Boholiubov held controlling stakes, saying the companies were needed for the war effort.

In February, SBU agents searched Kolomoisky’s home over accusations of tax evasion and that some $1 billion had been embezzled from the two companies.

Forbes Ukraine estimates his wealth has dropped to less than $900 million since Russia’s February 2022 invasion. Although he has lost a large share of his assets, he still controls the 1+1 television channel. At one point, it was Ukraine’s most popular, but its influence has greatly decreased as the government has severely restricted wartime broadcasts.

Trump embraces Putin’s sympathetic comments to claim political persecution

The cases against Kolomoisky have accelerated as Ukrainian officials pursue a high-profile anti-corruption campaign — and Zelensky looks to signal to Western partners providing billions in military and economic aid that he has zero tolerance for graft.

In recent months, authorities have cracked down on alleged corruption in the country’s tax authority and military recruiting system, while the country’s defense minister, Oleksii Reznikov, resigned last week amid allegations that his ministry overpaid for supplies, though Reznikov was not directly implicated.

In his regular evening address, following Kolomoisky’s jailing, Zelensky did not speak directly about the case, but he thanked Ukrainian law enforcement officials “for their determination to bring every case stalled for decades to a just conclusion.”

“There will be no more decades-long ‘business as usual’ for those who plundered Ukraine and put themselves above the law and any rules,” Zelensky said. “The law must work. It is so. It will be so.”

Kamila Hrabchuk contributed to this report.

Read More:Ukrainian oligarch Ihor Kolomoisky under pressure in criminal cases

2023-09-17 08:00:00

Get real time updates directly on you device, subscribe now.

Notify of
Inline Feedbacks
View all comments

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More