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Akhmetov built a massive business empire. In 2000, he founded SCM (System Capital Management), now one of the biggest industrial groups in Ukraine, of which he is the sole owner. The company’s website states that SCM employs 150,000 people and had an annual profit of US $8.151 bn in 2009. Akhmetov told Korespondent magazine that he controls around 140 companies.

One of SCM’s biggest companies is

Metinvest which owns several steel and mining businesses and has assets in the USA and several European countries, including the UK. In Ukraine, Metinvest owns Azovstal and Yenakieve steel works, Krasnodonvuhillya coal mining company, several iron ore companies, and Khartsyzs’ Pipe Works among others.

Another arm of SCM, DTEK, is an

energy business, “The first private vertically integrated energy company in Ukraine,” according to its website. It mines over a quarter of Ukrainian coal, controls almost half of the country’s thermal generation market and distributes about 8% of its electricity.

The financial businesses of SCM, apart

from Dongorbank, include First Ukrainian International Bank and ASKA insurance. He also owns the /Donbass Palace’s luxury hotel where you might stay when you go to see the Euro 2012 football matches in Ukraine. SCM also controls ‘Segodnya’, one of the most popular national daily newspapers, and Kanal Ukraina TV channel which has a smallish audience but with rapid rates of growth.

controversy. In 2004 the consortium Investicijno-Metalurgichny

Akhmetov’s name has attracted some Soyuz,

created jointly by Akhmetov’s SCM and another oligarch, the then president Kuchma’s son-in-law Viktor Pinchuk (No. 4 on the Korespondent’s rich list), made what must be their most notorious purchase. They bought Ukraine’s largest steel company Kryvorizhstal for UAH 4.26 bn (around US $800 m). After the Orange Revolution, the fiery new Prime- Minister, Yulia Tymoshenko, declared the deal fixed and re-privatised the company for almost US $5 billion. Forbes priced it at US $3.5 bn at the time. The buyer, Mittal Steel, must have questioned the value of this investment when steel prices tanked before recovering.

During the Orange years, Rinat Akhmetov

got along with President Yushchenko, but not with Prime Minister Tymoshenko. She waged a more obvious war against Dmytro Firtash (see the June/July 2010 edition of UBI), but seemed to have a strained relationship with most oligarchs.

Yet he borrows money and trades

stock in the West (according to the FT, he raised nearly US $2 bn last summer through Eurobonds and syndicated loans). Akhmetov also has Westerners on his SCM staff, and his steel business is dependent on the Western exports.

When his Party of Regions’ comrade

Viktor Yanukovych finally became President, some analysts in the West considered Akhmetov to be the ‘winner’ of these elections. But there are some signs that the richest oligarch would prefer to live in a slightly different country than the one Viktor Yanukovych’s team is very fast building.

Like Viktor Pinchuk, Rinat Akhmetov

has been making efforts to move away from the image of the nouveau riche, the source of whose first money is not clear, and rebrand himself as a progressive force for Ukraine. While Pinchuk has been financing modern art projects and prizes, anti-AIDS campaigns and YES (Yalta Economic Strategy forum), Akhmetov has sought to offer his country a vision of its economic development.

In 2006 his SKM group initiated the

creation of BEST, Bureau of Economic and Social Technologies, a think tank which consulted the then Party of Regions’ leader Viktor Yanukovych and Akhmetov himself. Its former head Iryna Akimova went on to chair the Committee for Economic Reform for the current government. She is sceptical about the possibility of a custom union between Russia, Ukraine, Belarus and Kazakhstan, and one can only assume that this opinion is shared by Akhmetov.

Another Akhmetov-sponsored think-

tank, Effective Management Foundation, presented a paper called ‘The Concept of Economic Development of Ukraine’ to great fanfare in 2008. This vision of a liberal economy, reduced role for the state, and an independent judiciary, was meant to become the basis for the future Yanukovych election manifesto. But it did not.

26 UkraineBusiness insight October/November 2010 But it is doubtful that President

Yanukovych, however grateful he might be for Akhmetov’s support, will want to make him too strong.

Political analyst Viktor Nebozhenko says

that President Yanukovych is, “afraid to repeat the fate of Kuchma and Yushchenko, when the oligarchs morphed the Ukrainian state through corruption, control of the media, their parties etc. And he wants to oppose them with the help of the Russian security services, Putin, Medvedev, Russia. He hopes to contain the Ukrainian oligarchs this way. He cannot fight Akhmetov himself, but he can put Putin up against Akhmetov.”

There is little doubt that Akhmetov

– whose businesses have been actively exploring opportunities in the West – has a big role to play in the future of the Ukrainian state, not only the economy. His support has been crucial for the popularity of the Party of Regions and Yanukovych’s victory. But watching Russia and the fate of its oligarchs, especially Putin supporters, mus have made Akhmetov contemplate the drawbacks of absolute power. Many suggest he may be the only oligarch interested in preserving democracy in Ukraine. One analyst suggests, “Akhmetov may be the first to finance a new opposition as soon as someone promising comes along.” UBi

A political consultant - who does not

wish to be named - says: “Ostensibly all the oligarchs are in the same stall, in the Party of Regions, and there is not much competition among them. But if you look closer, you will see that one of them has done the best out of the latest election, and it is Dmytro Firtash. His group of influence includes Valeriy Khoroshkovsky, the head of the Security Service; Serhiy Lyovochkin, the Head of President’s Administration [formerly Secretariat – UBI] etc. He has under his belt a decision in his favour by the Stockholm Arbitration Institute that the state of Ukraine owes citizen Firtash about US $5 billion.”

She adds that Akhmetov’s side feels a

little bit unappreciated. His most prominent ally in power is Borys Kolesnikov, Deputy Prime Minister in charge of the Euro 2012 championship. There is some indication, however, that Kolesnikov might be considered for a Prime-Ministerial position once the current head of government, Mykola Azarov, falls out of favour completely.

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