Indeed, Igor Kolomoisky is an eccentric person who has many masks. As a businessman, Kolomoisky is the leading partner of Privat Group – a multi-industry conglomerate based in Ukraine. Formerly, the group’s most notable asset was Ukraine’s largest commercial bank, PrivatBank.
As a philanthropist, and founder of the European Jewish Union, he funded the construction of the Jewish Community Centre ‘Menorah’ in Dnipro – the largest of its kind in Eastern Europe.
After the Euromaidan Revolution in 2014, Kolomoisky was appointed governor of Dnipropetrovsk Oblast. However, Kolomoisky started to face difficulties as soon as his business interests clashed with his political career and was dismissed in March 2015. Since then, he has lived in exile.
President Poroshenko is having a hard time these days. The Ukrainian election season is starting very soon, and Poroshenko’s critics are frequently attacking him for his business interests and private trips to Europe. Likewise, his presidential record is also a subject for a big debate.
In 2016, Anders Aslund argued that Ukraine’s most successful reforms were the reduction of the payroll tax and the public deficit decrease. However, he admitted that Ukraine’s inability to transform its judiciary and social systems was its most serious drawback.
According to Aslund, the judiciary reform could lay the foundation for the successful transformation of Ukraine in the long-term. In particular, it could potentially eradicate the harmful effects of oligarchic tensions, and a challenging business environment.
Likewise, the existence of independent courts could enable Kolomoisky to settle the PrivatBank case without international scandals, whereas the latest proceedings have taken place in London. Experts from Carnegie Endowment suggested that most critics accuse Poroshenko of placing his loyalists in the Ukrainian institutions.
In fact, London court battles are a recurrent feature of business and politics in the former Soviet Union. In the last six years, the British courts have examined numerous high-profile cases, such as Pinchuk v. Kolomoisky and Bogolyubov, Berezovsky v. Abramovich, and JSC BTA Bank v. Ablyazov.
However, Kolomoisky and his partners could not foresee some of the legal decisions. This proved to be the case when the High Court in London issued a freezing order against the assets of Kolomoisky and his partner Gennadiy Bogolyubov. Additionally, Kolomoisky’s personal spending was limited to £20,000 per week.
Perhaps, Kolomoisky accused Poroshenko of his interference in the latter case, but he added that the ruling was only a ‘temporary arrest’.
In short, there are two pertinent questions. What is the essence of this feud? Furthermore, is it about the economic reforms, or is it about the personal struggle for power?
Despite his initial approval of the deal, Kolomoisky was consistently attacking Poroshenko after he lost control over PrivatBank. The bank was nationalised in December 2016, with the government emphasising the importance of ‘preserving financial stability in the country’.
Nationalisation was an attempt to improve the banking system of Ukraine by creating safer conditions for the customers of the largest bank in the country. In 2016, PrivatBank provided services to 48.6% of the Ukrainians who used banking services.
Initially, the PrivatBank case was nothing more than a dispute with the National Bank of Ukraine. Though, now it could be interpreted it as a personal conflict between Kolomoisky and Valeriya Gontareva, the governor of the central bank in 2016.
On the other hand, it may be that Poroshenko wanted to obtain the control over other assets belonging to Privat Group. From Kolomoisky’s perspective, Petro Poroshenko used PrivatBank as a bargaining chip over the fate of Kolomoisky’s ‘1+1’ channel.
In April 2018, Kolomoisky blamed Poroshenko for suppressing the free speech in Ukraine. Kolomoisky noted that Poroshenko wants to acquire an absolute control over all television channels. He added that he does not intend to support Poroshenko’s 2019 re-election bid.
Nevertheless, there are few remaining questions that must be addressed. If Kolomoisky asserted that his partners never conducted any fraudulent activities, why did an independent report from Kroll prove that PrivatBank lost £4.2bn as a result of fraud?
Secondly, why did Kolomoisky and Bogolyubov meet with the former head of the presidential administration, Boris Lozhkin? Could they have discussed the terms for cooperation during the upcoming elections?
Lastly, if Poroshenko wants Ukraine to acquire a European mentality, why does he behave as the Soviet civil servant with regards to social and institutional reforms?
To sum up, it is difficult to find a trigger for their conflict, but the existing data sheds light on serious problems with the Ukrainian business environment. Undoubtedly, this scandal has led to the deterioration of the reputation of Ukrainian businessmen at an international level.
Ukraine needs foreign direct investment to boost its economic growth, but the potential investors are sceptical to work in Ukraine because of the tensions between the president and the oligarchy.