Gennady Korban, a long-time business partner of billionaire oligarch Ihor Kolomoisky, was placed back under house arrest by a Kyiv court on March 15 after spending several months in a detention center.
Korban, the founder of UKROP, a political party sponsored by Kolomoisky, was accused of organizing a crime group. He still faces trial on the charges, which he says are politically motivated.
Curiously, Korban’s unexpected release coincided with a rare visit by Kolomoisky to Kyiv.
The oligarch and former governor of Dnipropetrovsk Oblast lives in Geneva, Switzerland, but has been spotted at meetings in the Presidential Administration and Cabinet of Ministers several times in the last month.
There has been speculation in the Ukrainian media that the timing of Korban’s release and Kolomoisky’s meetings could mean the oligarch has reached agreement with President Petro Poroshenko and Prime Minister Arseniy Yatsenyuk.
But Korban’s defense lawyer, Andriy Bohdan, says he sees no connection between Kolomoisky’s talks with Ukraine’s leaders and the release of his client.
“Korban was released because the judge finally read the criminal code and saw there was no risk in keeping Korban under house arrest,” Bohdan said.
Meanwhile, Kolomoisky told the Kyiv Post he “can’t comment on the rumors” about the reason for Korban’s release.
Korban was arrested at the end of October 2015 and charged with organizing a criminal group, kidnapping, and embezzlement. A week later, he was released under house arrest — only to be detained again in December.
His defense initially demanded his release on health grounds, but the court refused, and Korban had a minor heart operation while in detention.
But on March 15 the same judge at the Kyiv Dniprovsky District Court that had ruled to keep Korban in detention ruled that he be placed under house arrest instead. And this time, Korban wasn’t even ordered to wear an ankle monitor.
Moreover, just two hours before the Kyiv court made its ruling, the Appeals Court of Kyiv rejected an appeal from Korban’s defense to let their client go home.
What Kolomoisky offers
If the unexpected release of Korban is due to Kolomoisky coming to an agreement with the Ukrainian authorities, questions arise over what the oligarch may have offered in return.
Kolomoisky sponsors the new political party UKROP, founded by Korban in 2015, which competes against the parties controlled by Poroshenko and Yatsenyuk. Its representatives did well in local councils elections in October, and at least three lawmakers in parliament are UKROP members.
Although he has never confirmed or denied it, political experts also believe Kolomoisky influences Vidrodzhennya (Renaissance), a party that has 23 lawmakers in parliament. The party is led by lawmaker Vitaliy Khomutynnik.
“I have a very warm relationship with Khomutynnik,” Kolomoisky said in an interview with the LB.ua online newspaper in December.
Perhaps tellingly, Vidrodzhennya’s lawmakers didn’t support a vote of no-confidence to unseat Prime Minister Arseniy Yatsenyuk initiated by the pro-presidential Bloc of Petro Poroshenko faction in parliament on Feb. 16. The vote failed, leading to the de facto collapse of the parliamentary coalition, and plunged the country deep into political crisis.
Since then, the pro-presidential faction has been struggling to garner enough votes to put forward a candidate to replace Yatsenyuk, who has said he will voluntarily resign when parliament selects another candidate.
Securing the votes of Vidrodzhennya would be a step towards gaining backing for a new prime minister candidate, and helping to end the crisis for the Bloc of Petro Poroshenko.
In addition, the offer could include media support for the authorities: Kolomoisky owns the 1+1 Media Group, which includes eight TV channels.
In the past, Kolomoisky has used his media holdings to support allies or attack enemies. In 2015, the main channel of the group, 1+1, gave broad coverage to the campaign of Korban when he unsuccessfully ran for parliament in Chernihiv.
Solution to Ukrnafta
The putative deal between Kolomoisky and Ukraine’s top leaders may also have a business element, media speculate. On the evening of March 15, shortly after the judge released Korban, Kolomoisky met with Yatsenyuk in the Cabinet of Ministers. The subject of the meeting was Ukrnafta, a state oil trade company in which Kolomoisky owns a 42 percent stake.
Ukrnafta has long been a bone of contention for Kolomoisky and Ukraine’s leadership. The oligarch has co-owned the company for more than 10 years, but from 2011 Kolomoisky used his control over the company to block shareholder meetings, and thus the payment of dividends to the state. The dividends debt soon reached Hr 1.8 billion.
In response, in 2015 parliament passed a law that changed the quorum rules for companies co-owned by the state, allowing the state to call a shareholder meeting and restart dividend payments from Ukrnafta. Kolomoisky wasn’t happy: he resigned from his governor’s job in Dnipropetrovsk, where he had worked to bolster the government against separatism in the east, and started supporting UKROP. All the same, Ukrnafta paid off its dividend debts.
In the meantime, Ukrnafta has racked up even bigger debts for taxes, and now owes the state Hr 10.2 billion. At a meeting in the Cabinet of Ministers on March 15, Ukrnafta CEO Mark Rollins presented a plan of “sanitation,” or readjustment for the struggling company that would allow it to restructure its debts and stretch the repayments over several years.
Kolomoisky told the Kyiv Post he agreed with the plan. When asked if the Cabinet had accepted it too, he simply quoted Charles Erwin Wilson, the former CEO of General Motors, saying: “What is good for General Motors is good for America.”
