Control Is the Best Form of Trust
// The Black List of Ukrainian Re-Privatization
Kommersant obtained the list of 29 enterprises, which were presented recently to the Ukrainian cabinet of ministers for possible re-privatization. From these 29 companies there are four that are controlled by Russian firms. However, most likely, these four companies will not change owners.
The working group of the Ukrainian parliamentarians, the heads of the Fund of the State Property (FSP), the representatives of ministries and government structures finished the first stage of inventory of privatized enterprises on May 16. The result of this inventory became the list of 29 companies that could be re-privatized. The official reason for re-privatization -- possible illegal activities during the initial privatization, including unfair competition, intentional cost lowering of services and products, failing to fulfill contractual obligations and ineffective management.
First vice-premier of Ukraine Anatoly Kinakh said that final version of the list is "given for the examination to the heads of the state." Kinakh noted that the list is only the first stage of inventory of strategic Ukrainian enterprises. The final decision of re-privatization would be made by the courts.
"It is necessary not to allow the redistribution of Ukrainian properties outside of law constrictions,” explained the state official. "That's why we created the special supervision group headed by me. The group's actions are transparent. Any parliamentarian can participate in the sessions. All questions are being discussed with participation of management and owners."
It is interesting that Ukrainian prime-minister Yulia Timoshenko is actually denying the statements of her first deputy. "There is not and there will be no list of sacrificial lambs," Timoshenko told journalists yesterday. However, she said, that there will be soon adopted a law about additional payments for already privatized structures. "But there is no list, there are just criteria," Timoshenko précised her point. "And we will not let anybody to sort out the enterprises belong to political opponents or those who hold the power."
Despite these assurances, Kommersant was able to find out that the "Kinakh List" exists. The Kommersant source in the Secretariat of Ukrainian president named 29 enterprises (look for the notes). Among these enterprises there are four companies with Russian capital participation. These are Zaporozhye Aluminum Combinat (ZAlK) with 93.01 percent of its stock through AvtoVAZ-Invest belong to SUAL-Holding of Viktor Vekselberg; Lukor has 52.7 percent of its shares belonging to Lukoil -Neftekhim ( affiliate of Lukoil); Nikolaevsk Alumina Plant (NAP), which is owned by Russian Aluminum; and Rosava which is controlled by Amtel holding group.
Though, according to Kommersant information, several companies on the list, including the ones controlled by Russian business, already had deflected the threat of re-privatization. For instance, Amtel representatives told Kommersant that a week ago Rosava had an audit from FSP. "They researched the dynamics of the production volumes, compliance with social and investment programs, the schedule and amount of taxes and the legal ownership rights," Amtel's management said. "The commission was completely satisfied with the audit results. The commission members told us that they found no problems with Rosava and its owners." However, the holding group decided to be prepared for a worst case scenario just in case. Ukrsibbank is still the official owner of Rosava. The sources in Lukor said: "We comply with all necessary norms. As of right now we conducting the negotiations with the working group members and there is a chance that the problem will be solved."
Kinakh himself had promised that nobody will touch the oil refinery. The fate of ZAlC is undetermined so far. Alexei Prokhorov, director of public relations department of SUAL Holding told Kommersant: "There were no audits in ZAlC, in AVI or in SUAL from the Ukrainian government finance authorities do to the alleged fact of ZAlC being in the re-privatization list of enterprises. We had no official notices that ZAlC is included in this list, either."
In the same time, the majority of the companies on the list already receive notices about potential problems. "There are serious questions about North-Donetsk company Azot, there are problems with privatization of Black Sea Ship Building plant and with several other companies," Kinakh confirmed to Kommersant.
Most likely, the Ukrainian re-privatization will involve first of all the assets of local proprietors. "Viktor Yushenko considers Russian business owners as potential lobbyists of his cause in Kremlin," thinks Stanislav Belkovsky, head of Moscow Institute of National Strategy, who was lobbying the interests of Russia in Ukrainian elections last year. "Oleg Deripaska and Viktor Vekselberg are the most influential from the Russian businessmen. I think, the Ukrainian president will find agreeable terms with both of them and they will keep the business. But Deripaska is more influential in the Kremlin right now than Vekselberg. That shows by the fact that the oil refinery is almost problem-free versus AZlC, which is swarmed by speculations. But the main victims of re-privatization will be Ukrainian entrepreneurs."
In the mean time, after the state gets back the enterprises, they will be offered for sale (Timoshenko had said that many times already). Many Russian companies, including Severstal'- group, Evrazholding, Renova group and the structures of the co-owner of Ural Steel Alisher Usmanov already officially declared their interest to these would be-for-sale companies.
Kommersant will monitor the future events.
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Who was included into the Kinakh List
According to Kommersant information, there are 29 companies that could be re-privatized soon. Here they are: Krivorozhstal’, Central Mining Combinat, North Mining Combinat, Inguletsk Mining Combinat, Mining Combinat “Sukhaya Balka”, Krivorozhsky Iron Ore Combinat, Novotroitsky Rudoupravlenie, Dokuchaevsky Flyudosodolomitny Combinat, Severodonetsk Ob’edinenie Azot, ZAlC, Nikolaev Alumina Plant, Lukor, Rosava, Black Sea Ship Yard, Galitchina, Rivneazot, Dnepropetrovsk Metalurgical Combinat of F.Dzierzhinsky, Oranta, Nikopolsky South Pipe Plant, Chistye Metally, Azovmash, Herson Ship Yard, Rubezhansk Cardboard Factory, Herson Cotton Factory, Ukrpapirprom, Irshansk Mining Combinat, Volnogorsk Mining Combinat.
Oleg Gavrish, Kiev; Renata Yambaeva, Maria Molina
All the Article in Russian as of May 18, 2005
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