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Oligarch Akhmetov in Legal Hot Water

Asset freezes, extradition proceedings are crimping the style of some of Ukraine’s most powerful tycoons.

9 January 2018

Ukrainian business tycoon Rinat Akhmetov (pictured) has appealed a Cyprus court ruling seizing $820 million of his assets.

 

The District Court of Nicosia ordered the asset seizure late last month at the request of a company called Raga, also owned by a Ukrainian oligarch, which claims Akhmetov’s SCM Financial Overseas company has failed to pay it most of the $860 million price for the 2013 purchase of Ukraine’s fixed-line telephone provider Ukrtelecom, Interfax-Ukraine reports, citing a report yesterday in the Financial Times.

 

In early December, the London Court of International Arbitration ordered SCM to pay Raga $760 million, plus $60.4 million in interest and legal costs. Raga claimed it had received only the first installment of $100 million for formerly state-owned Ukrtelecom, Global Arbitration Review reported, according to the report.

 

SCM FO for its part claimed Raga had not fulfilled its obligations during the privatization of the once-state owned telephone company.

 

But that argument is also being used against Akhmetov’s company by the Ukrainian government, which seeks to renationalize Ukrtelecom on those grounds, the Financial Times wrote on 5 January.

 

The SCM-Raga dispute could draw in another powerful Ukrainian business leader, Dmytro Firtash. Raga owes $300 million to his Group DF, which partially financed the privatization of Ukrtelecom, the FT says.

 

Raga’s owner Denis Gorbunenko acquired Raga in 2013, but according to the London arbitration court, SCM stated the discussions about Akhmetov buying a stake in Ukrtelecom began in 2012 at “the request” of Ukraine’s president at the time, Viktor Yanukovych.

 

The order against Akhmetov means that asset freezes are now in place on three of Ukraine’s five richest businessmen, the FT notes. London’s High Court last month ordered a freeze on $2.5 billion of assets belonging to Igor Kolomoisky – an Akhmetov rival – and Gennady Bogolyubov in an unrelated case related to a Ukrainian bank.

 

And Firtash is battling a U.S. request to extradite him from Austria to face charges of bribery. Spain also wants to try him for money laundering, but an Austrian court refused to extradite him last month, saying the Spanish case was not strong enough, RFE/RL reported. 

 

 

  • Akhmetov is often called Ukraine’s richest man, with assets in the low billions. His SCM group owns one of Europe’s biggest iron and steel companies, Metinvest, and the DTEK Dniproenergo power company, as well as Shakhtar Donetsk, one of Ukraine’s most successful soccer clubs.

 

  • The Cyprus court order lists Shakhtar Donetsk, along with some very expensive London real estate, among the assets that could be seized, according to Global Telecoms Business.

 

  • He has been described as one of Yanukovych’s closest political associates who remained influential after the latter fled to Russia in 2014.

Compiled by Ky Krauthamer

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