A local court in Kyiv dismissed an eight-year-old case surrounding the privatization of Kryvorizhstal, one of Ukraine's largest steel mills, which could have potentially taken it out of the hands of a foreign investor and returned it to a company that two well-connected oligarchs had established to purchase it during the first state sale.
But the investor’s troubles
are not over yet as a bill is still pending in parliament that calls for nationalization of the mill that now belongs to ArcelorMittal, a global steel
titan.
The Kyiv Commercial Court on
July 9 dismissed the case because the plaintiff failed to show up in court
three times. The plaintiff, Investment-Metallurgical Union, co-owned by
Ukraine’s richest oligarchs Rinat Akhmetov and Viktor Pinchuk, appealed the
steel mill’s 2005 nationalization, which led to a repeat privatization the same
year.
They filed an appeal in
Ukraine, and another one to the European Court for Human Rights. The latter is
still pending.
In the same year, Kryviy Rih
steel mill was purchased for $4.8 billion by Lakshmi Mittal’s global titan
through a competitive tender that still remains the biggest in Ukraine’s
history. A year earlier, Akhmetov and Pinchuk bought the plant for $800
million.
The appeal by
Investment-Metallurgical Union against the State Property Fund’s decision to
nationalize the mill sat in court until May, when it suddenly moved.
Representatives of Pinchuk and Akhmetov’s investment holdings vehemently denied
pushing the case.
Volodymyr Tkachenko, head of
Kyiv office of ArcelorMittal Kryvyi Rih, said he felt “positive” about the
decision of presiding judge Yuriy Vlasov to close the case on july 9 because of
the plaintiff’s no-show in court for two months.
“We could have used the time
to develop our enterprise instead of waiting for this baseless hearing,” he
said.
Yuriy Nikitin, head of the
Department for Agreements Management at the State Property Fund of Ukraine, who
represented the defendant in court, said there were no other cases pending in
Ukraine that could potentially challenge the ownership rights of ArcelorMittal.
However, two Communist
deputies in June filed a draft bill in parliament to nationalize the steel mill because
of the investor’s failure to fulfill social commitments undertaken during
privatization. In the explanatory note accompanying the bill, the authors said
nationalization of the property will “renew social justice, protect interests
of the state and the working collective, and create preconditions for
successful development of metallurgy in Ukraine.”
The authors, Communist Party
leader Petro Symonenko and lawmaker from the same faction Serhiy Balandin, said
ArcelorMittal has illegally reduced the number of workers at the plant by nearly
20,000 people since privatization in 2005 and failed to raise their wages.
Tkachenko denied any wrongdoing, saying instead that his company has seen an
increase in government inspections recently.
