Ultima Thule

In ancient times the northernmost region of the habitable world - hence, any distant, unknown or mysterious land.

Friday, February 18, 2005

Sale of Steel Mill ruled illegal

By Aussiegirl

Washington Post takes an in-depth look at Thursday's court ruling which declared that the privatization of Ukraine's largest steel mill, Kryvorizhstal was illegal. This reversed the court's own previous ruling. It had been sold to Viktor Pinchuk, Kuchma's son-in-law and an associate, for a much lower bid than that offered by several American and Russian companies. It is the opening salvo in the new administration's aim to clean up what has been seen as fraudulent deals which enriched a number of Kuchma cronies.

Showing his eagerness to get along, Pinchuk quickly recognized the ruling of the court and vowed to follow the law. (in another report I read that he had offered to make up the difference between his own bid and whatever bid comes in highest at the next sale). His lawyer of course, decried the ruling as "illegal".


Yushchenko has called the mill's sale for $800 million a theft. He pledged earlier this week that his government would return the mill to the state "at any cost." He has said that if the mill is put up for a transparent resale open to foreign bidders, the government might receive more than double what it sold it for last year.

Andriy Dmytrenko, an analyst with the Kiev-based Dragon Capital investment bank, called the court ruling "one of [the] first steps in the process of the cancellation of murky privatization deals."

. . .Analysts have warned that a massive re-privatization could be used as political revenge by the new leadership against Kuchma loyalists and could scare potential investors.

Yushchenko tried to dissipate those fears Monday, telling an investment conference that a list of enterprises to come under scrutiny "will be limited and final and will not be extended after its completion."

Prime Minister Yulia Tymoshenko said Wednesday that the government would investigate the privatization of about 3,000 enterprises to learn whether they had been sold at discounts to tycoons connected with the former government.

Dmytrenko said that the government should develop "an elaborate mechanism of repossessing illegally privatized companies" to avoid "a situation similar to Russia's Yukos."


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