Ukraine's far-reaching move on 6 November to nationalize five strategic enterprises rectifies the errors of the 1990s when the early oligarchs privatized large Soviet enterprises without due process, thereby enriching a few later known as oligarchs. It is both a decisive and symbolic blow to Ukraine's oligarchy, effectively reducing its political influence. Despite the move receiving little attention during the war, this would not have been possible without preceding work and reforms.
The nationalization of five enterprises on 6 November 2022 targets the country's most powerful oligarchs who have already started losing influence due to previous criminal proceedings:
Kostiantyn Zhevaho/ Source: Wikipedia
Kostiantyn Zhevaho, formerly one of the top five of Ukraine's wealthiest, recently lost his Avtokraz company. It manufactured heavy vehicles, including those used by the military. He spent years abroad while on Interpol's wanted list since 2019 at Ukraine's request. He is accused of laundering $113 million through his bank, Finances, and Credit, which was declared insolvent by the state and liquidated.
Kostiantyn Hryhoryshyn/ Source: (Photo: InA "Ukrainian photo"), rbc.ru
Kostiantyn Hryhoryshyn lost the Zaporizhtransfomator factory producing electricity transformers. It is only the latest blow to his energy empire.
Ihor Kolomoyskyi/ Source: First Western, photo: Minfin
Ihor Kolomoiskyi, the country's best-known oligarch, sanctioned by the US, lost shares in two oil companies, Ukrtatnafta and Ukrnafta. Ukraine nationalized one of the biggest oil production companies, gas station networks, and Ukraine's largest oil refinery in Kremenchuk.
This move is particularly significant given Kolomoiskyi's reputation as an oligarch who supported Zelenskyy during the 2019 elections. In early September, NABU announced suspicions against the former head of Ukrnafta and seven other former employees. They are suspected of seizing the company's assets and funds worth UAH 13.3 billion in 2015.
On 17 September 2022, NABU detectives came to Kolomoiskyi with a search warrant for this case.
Viacheslav Bohuslaiev/ Source: Wikipedia
Viacheslav Bohuslaiev lost influence over the Motor Sich factory manufacturing helicopter engines and was also arrested alongside the head of the company's department of foreign economic activity, Oleh Dziuba. They were accused of collaborating with Russian invaders by supplying engines to Russia.
Kostiantyn Zhevaho/ Source: Wikipedia
Kostiantyn Zhevaho, formerly one of the top five of Ukraine's wealthiest, recently lost his Avtokraz company. It manufactured heavy vehicles, including those used by the military. He spent years abroad while on Interpol's wanted list since 2019 at Ukraine's request. He is accused of laundering $113 million through his bank, Finances, and Credit, which was declared insolvent by the state and liquidated.
Kostiantyn Hryhoryshyn/ Source: (Photo: InA "Ukrainian photo"), rbc.ru
Kostiantyn Hryhoryshyn lost the Zaporizhtransfomator factory producing electricity transformers. It is only the latest blow to his energy empire.
Ihor Kolomoyskyi/ Source: First Western, photo: Minfin
Ihor Kolomoiskyi, the country's best-known oligarch, sanctioned by the US, lost shares in two oil companies, Ukrtatnafta and Ukrnafta. Ukraine nationalized one of the biggest oil production companies, gas station networks, and Ukraine's largest oil refinery in Kremenchuk.
This move is particularly significant given Kolomoiskyi's reputation as an oligarch who supported Zelenskyy during the 2019 elections. In early September, NABU announced suspicions against the former head of Ukrnafta and seven other former employees. They are suspected of seizing the company's assets and funds worth UAH 13.3 billion in 2015.
On 17 September 2022, NABU detectives came to Kolomoiskyi with a search warrant for this case.
Viacheslav Bohuslaiev/ Source: Wikipedia
Viacheslav Bohuslaiev lost influence over the Motor Sich factory manufacturing helicopter engines and was also arrested alongside the head of the company's department of foreign economic activity, Oleh Dziuba. They were accused of collaborating with Russian invaders by supplying engines to Russia.
Shares of five strategic companies taken over by Ukraine Defense MinistryAccording to the law "On the transfer of property under martial law," the government is required to compensate the value of the enterprises nationalized during martial law for military needs. It must provide compensation or return the property in the course of one year after martial law ends. However, given the numerous investigations and criminal proceedings against oligarchs, particularly the owner of the most important company Motor Sich, Viacheslav Bohuslaiev, it is unlikely that they will ever be compensated.
The end of post-Soviet oligarchs in Ukraine
The 1990s and early 2000s were the golden age for oligarchs in Ukraine. However, these times have passed and nowadays, the state of oligarchs in Ukraine is little different from that in other European countries. When the USSR collapsed in 1991, shares of the largest state companies were distributed among their thousands of workers as part of the privatization campaign. However, since the stock market was not yet formed, each individual share had little meaning for employees. They mostly sold their shares for symbolic prices or some manufactured goods to the post-Soviet managers of the companies or those who understood quickly the value of assets. In this way, Ukraine's large state energy, metallurgical, and engineering enterprises ended up in the hands of a few dozen oligarchs. Through owning also the country's biggest TV channels and financing political parties, the oligarchs started wielding their influence on politics. However, the situation started changing in the 2000s, when the number of small and medium enterprises skyrocketed as the economy gradually became more liberalized and bureucracy was simplified. The introduction of the simplified tax system for small entrepreneurs (FOPs), and online registration of businesses with low taxes, which was gradually implemented after 1998, is one of the examplesTrending Now
How Ukraine’s helicopter tsar helped arm the enemy
Read more:
- How Ukraine's helicopter tsar helped arm the enemy
- What everyday corruption looks like in Ukraine
- Why post-Euromaidan anti-corruption reform in Ukraine is still a success
- Decentralization — a true success story from Ukraine
- SBU detained Motor Sich aerospace company's president
- Ukraine holds first-ever confiscation of illegal assets
- Ukrainian High Anti-Corruption Court confiscates Russian oligarch's assets
- Here is how Ukraine can finally prosecute top-corrupt officials
- $24 million of confiscated in Ukraine assets already transferred for Ukraine's defense
- Ukrainian anti-oligarch law inadvertently shines spotlight on Russian-linked members of presidential entourage
