Ukrainian Oligarchs Lose Wealth, Keep Power In Crisis

DONETSK, Ukraine -- What's the difference between a Ukrainian and a Russian oligarch? They both lead lavish lifestyles, adore football, and have lost billions in the financial crisis.

A multi-billionaire and top leader of the Regions Party, Rinat Akhmetov.

But unlike their now politically timid Russian counterparts, Ukraine's super rich are unafraid of meddling in politics and are seen playing a key role ahead of January presidential elections.

Russian billionaires have steered clear of politics since several fell foul of the law under strongman ruler Vladimir Putin, including the now jailed head of the Yukos oil giant Mikhail Khodorkovsky.

Their Ukrainian counterparts may be less well known outside the country but an elaborate courtship dance with its highly polarised political elite is being followed avidly by the nation.

"Our situation is different to Russia. The state does not put this pressure on big business. It prefers a process of negotiations and compromise," said Oleksandr Lytvynenko, senior political analyst at the Razumkov Centre.

In the southeastern industrial city of Donetsk, whose region is home to the country's biggest concentration of mining, metal and chemical industry, it's hard to escape the presence of one man -- Rinat Akhmetov.

Akhmetov is the multi-billionaire owner of System Capital Management, a conglomerate whose interests range from mining and metals, to banking and the media.

The coal miner's son owns regional and national newspapers, the top Donetsk hotel and above all the city's pride and joy -- its football side FC Shakhtar Donetsk.

Thanks to Akhmetov's support, Shakhtar are now a regular in top European competitions and will move this year to a new 50,000-seat stadium which is being built for the club on the city outskirts.

The ethnic Tartar had always been seen as the financial muscle behind the Party of the Regions of Viktor Yanukovich, the pro-Moscow faction which reaches out to the Russian speaking population of areas like Donetsk.

But over four years after the Orange Revolution that brought pro-Western leaders to power, Akhmetov is now playing a more cautious game and political analysts are intrigued by his increasing closeness to Prime Minister Yulia Tymoshenko.

"The current political strategy of Rinat Akhmetov is to balance creating a positive image for himself while improving relations with decision makers who until recently were implacable foes -- like the Tymoshenkoites," the weekly Kommentarii wrote.

According to Volodymyr Fesenko, the director of the Penta centre for political research, "businessmen do not want there to be a single winner in the Ukrainian political fight in whom all the power is to be concentrated."

"The situation is changing, some oligarchs are distancing themselves from politics while others are diversifying their political activities.

"They are spreading their risk."

According to the latest rich list of US magazine Forbes published this month, Akhmetov is now the 397th richest man in the world with a fortune of 1.8 billion dollars compared with 7.3 billion last year.

Like almost every oligarch across the former Soviet Union, his fortune has been hit by the slump in commodities prices amid the economic crisis and also the plunge in equity markets.

Forbes' figures show he has now been overtaken as Ukraine's richest man by Viktor Pinchuk, the founder of the Interpipe piping company and a son-in-law of former president Leonid Kuchma.

Pinchuk, whose fortune was estimated at 2.6 billion dollars compared with five billion before the crisis, himself served as a member of parliament between 1998-2006.

But according to his website, he has now "retired from politics" and channels his finances into charity work and cultural events.

He was behind ex-Beatle's Paul McCartney's open air concert in Kiev last year and his Pinchuk Art Centre will in April show a major retrospective of British modern artist Damien Hirst.

Akhmetov and Pinchuk lost out in the aftermath of the Orange Revolution when their joint purchase of the country's largest steel producer Kryvorizhstal for a bargain price in 2004 was denounced by Yushchenko and then annulled by a court.

It was then sold to Indian giant Mittal Steel for almost five billion dollars, almost seven times more than what the two oligarchs had paid. But now both businessmen are members of a charity fund headed by Yushchenko's daughter.

Ukraine's third richest man according to Forbes, Ihor Kolomoysky, is a more reclusive figure, but who is still seen playing a prominent role in politics after switching allegiances between Tymoshenko and her foe, President Viktor Yushchenko.

The Dnepropetrovsk-based billionaire's Privat group is one of the biggest holdings in Ukraine with interests in steel, food and banking.

Another prominent figure is Dmitry Firtash, who has long been seen as an ally of Yushchenko and foe of Tymoshenko and is the co-owner of energy trader RosUkrEnergo.

Source: AFP

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