Ukraine leader fires oligarch Kolomoisky as regional chief

Reuters News
Posted: Mar 25, 2015 2:01 AM

By Richard Balmforth

KIEV (Reuters) - Ukraine's president has fired billionaire Ihor Kolomoisky as governor of a key region in the east, the presidential website said on Wednesday, after armed men that lawmakers said were linked to the oligarch raided a state-owned oil firm.

Kolomoisky has been at the center of a political storm since the masked men briefly entered the offices of UkrTransNafta on Thursday night after its director, his ally, was summarily replaced.

As governor of Dnipropetrovsk, Kolomoisky, a banking, energy and media tycoon with a fortune put at $1.8 billion by Forbes last year, has been a valuable ally to the central government by financing volunteer battalions there to defend against pro-Russian separatists.

But a statement on President Petro Poroshenko's website said he had dismissed Kolomoisky after the oligarch had offered to step down during a meeting late on Tuesday .

Poroshenko came under pressure from deputies opposed to the power of Ukraine's super-rich to sack Kolomoisky after the March 19 night raid on UkrTransNafta's offices. The tycoon himself appeared at the scene and angrily cursed and berated journalists.

But it will have been a difficult decision for Poroshenko, who, while a shaky ceasefire is still holding, is seeking to win back the diplomatic initiative in the crisis with Russia over separatist-held territories in the east.

The separatists control large swathes of the east including the two big towns of Donetsk and Luhansk and Poroshenko owes much to Kolomoisky for preventing the rebels seizing control of areas of Dnipropetrovsk region too.

There was no immediate word from Kolomoisky's camp.

Kolomoisky, 52, is one of a handful of so-called oligarchs who emerged in the early years after Ukraine's independence from the Soviet Union in 1991 to secure control over large sections of the economy, including key areas such as energy, and becoming key political players behind the scenes.

Poroshenko himself built a billion-dollar empire in confectionery before becoming president last May after street protests ousted the Moscow-backed Viktor Yanukovich from power, triggering Russia's annexation of Crimea and the separatist rebellions in the east.

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The affair at the Kiev offices of UkrTransNafta turned the spotlight again on the role of Ukraine's super-rich and the future of their business empires as the country grapples with an economic crisis and a separatist war.

Kolomoisky, co-founder of the banking chain Privatbank, has interests in energy, media, aviation and metals. He has no direct business connection with UkrTransNafta, which is under full state ownership.

But Serhiy Leshchenko, one of two radical deputies who are pressing for the wings of the oligarchs to be clipped, had accused Kolomoisky of making a crude power play which challenged the state and the President's legitimacy.

(Additional reporting by Natalia Zinets; Writing by Richard Balmforth; Editing by Andrew Heavens)