Ukraine Probes Tycoon Linked To Tymoshenko

KIEV, Ukraine -- Ukraine’s authorities have carried out probes at businesses owned by a tycoon linked to Yulia Tymoshenko, sparking concerns that a legal campaign against the former prime minister may be spreading to business people who have backed her.

Kostyantyn Zhevago

Kostyantyn Zhevago, majority owner of the London-listed iron ore producer Ferrexpo, has seen several of his other businesses subjected to law enforcement investigations this week.

They included a raid on Monday by an armed state security squad.

Ms Tymoshenko and her political associates have come under heavy legal pressure since her narrow defeat in presidential elections last year by Viktor Yanukovich, her arch-rival.

The former premier herself is now on trial on charges of abuse of office, which carry a potential 10-year prison sentence. She denies the charges.

Mr Zhevago is a member of Ukraine’s parliament, where he has been part of Ms Tymoshenko’s political bloc.

But people close to him said they were surprised that he should come under pressure as he has taken a neutral position in politics over the past year.

Some analysts suggested the probes might be linked to an attempt by Mr Yanukovich to curb the political influence of all oligarchs, much like Vladimir Putin did when he consolidated power in Russia a decade ago.

One of Mr Zhevago’s companies – the tyre producer Rosava – is sufficiently concerned by the probes to have released on Tuesday a public appeal to the president and the SBU, Ukraine’s security service, for an explanation.

“The 5,000-person working collective of Ukraine’s largest tyre factory appeals to the president and the SBU leadership to explain yesterday’s bombardment of the plant’s office by a special SBU squad,” the statement reads.

Associates of Mr Zhevago said his best-known business, Ferrexpo – which Mr Zhevago is rumoured to be considering selling – and its Ukraine-based ore mining assets had not faced investigation.

But they said the probe at the Rosava plant was aggressive enough to warrant the public appeal.

They said the plant’s operations were temporarily “paralysed” on Monday, when armed SBU guards rushed into the central offices of the plant, just south of Ukraine’s capital, Kiev.

Maksym Prasolov, spokesperson for 37-year old Mr Zhevago, the youngest of Ukraine’s business oligarchs, described the use of the SBU, successor body to the Soviet KGB, as “inadequate”.

“Were they looking for spies in the tyres produced by the plant? What motivated this show?” he asked.

People familiar with the situation said that – in less aggressive visits – law enforcement officials also sought and seized documents from two other Zhevago-owned businesses: Finance & Credit bank, and Arterium, a pharmaceutical company.

Mr Zhevago’s associates said they were unaware of the details and motives of the investigations, which law enforcement officials hinted were part of a “wider investigation”.

Mr Prasolov said he could not see a connection between the probes and the oligarch’s role in politics.

Mr Yanukovich has repeatedly denied persecuting opponents amid rising concern in the US and EU that his administration is sidelining opponents via politically motivated investigations.

Vadym Karasiov, a Ukrainian political consultant, said: “Mr Zhevago may have felt that his position was neutral and safe, but this is a clear signal to all of Ukraine’s oligarchs that neutrality and loyalty is not enough.”

“For now, Mr Zhevago’s business will not be destroyed or taken away. But Yanukovich is making clear that he does not want to be a puppet of Ukraine’s long-dominant oligarchs,” Mr Karasiov added.

Source: FT