Lawyer: Court Cancels Earlier Mill Decision

KIEV, Ukraine -- A Kiev court canceled its earlier decision to reconsider a complaint about the legality of last year's privatization of Ukraine's largest steel mill, a lawyer for the owners said Friday.

The ruling late Thursday by Kiev's Pechersky Court represents a significant victory for the current owners of the Kryvorizhstal steel mill, said lawyer Serhiy Vlasenko.

The Pechersky Court refused comment.

But the consortium, which bought the mill at an allegedly rock-bottom price, still faces a government lawsuit aimed at canceling what had become one of this former Soviet republic's most disputed privatization deals.

Kryvorizhstal, the country's most profitable mill, was sold to the son-in-law of former President Leonid Kuchma and another tycoon for $800 million. The sale went through despite reportedly higher offers from major steel bidders in the United States and Russia and sparked outrage in Ukraine and abroad.

New President Viktor Yushchenko has called the mill's sale a theft, and pledged that his government would return it to the state "at any cost."

In February, the Pechersky Court agreed to reconsider a lawsuit filed by a small group that included lawmakers challenging the privatization. On Thursday, however, the court canceled its earlier ruling "based on newly revealed developments," said Vlasenko.

A separate lawsuit by the Prosecutor General's Office to have ownership of the mill returned to the state is currently before Kiev's Economic Court.

"As of today, all courts ... have confirmed the legality of the privatization of Kryvorizhstal," Vlasenko said. "Hence, Kiev's Economic Court, which is considering a similar case, has no other exit ... but must take a similar decision."

It was not immediately clear when the Economic Court would rule on the matter.

Lawyer Irina Nazarova, who represents the group of lawmakers loyal to Yushchenko who had filed the petition to cancel the privatization, could not immediately be reached for comment.

Yushchenko's government has promised to review other privatizations of key enterprises and undo deals that put state property in the hands of people close to the previous regime.

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