Oleg Tsarev: All Oligarchs in Ukraine Are Bankrupt, Except Poroshenko and Kolomoisky

Translated by Ollie Richardson & Angelina Siard



For Rinat Akhmetov the blockade and nationalization is not only a disaster, but also an opportunity, thinks the former People’s Deputy of the Verkhovna Rada Oleg Tsarev. The oligarch can use these force majeur circumstances as a pretext not to repay huge loans.

Q: Why does Rinat Akhmetov, the enterprises of which the LDPR arranged at first a blockade, and then nationalized them all, show external tranquillity? What does he know that we don’t know?

“As far as I know Akhmetov is undemonstrative, but of course he worries that he lost his assets in the LDPR. But believe me, as a former member of the parliamentary committee of the Verkhovna Rada of Ukraine, who was also engaged in tax policy, I know very well the structure of his companies.

You look, China, Brazil, Australia, and Russia are the largest exporters of iron ore raw materials in the world. As for Ukraine, there the situation with the export of iron ore differs from these countries by its low rent for ore production. In due time we initiated its increase, but our initiative didn’t find, for obvious reasons, the support of the government.

In the same Australia the tax on the production of iron ore is 40 times higher than in Ukraine. Can you imagine? In Australia this industry is involved in forming the budget. While in Ukraine all profit remains in the pocket of Akhmetov. For him the main thing in his business are his ore mining and processing enterprises. They are the generator of money. Once, a second direction existed — subsidies for coal mining, but now this doesn’t exist anymore. And metal by itself, which is melted at his plants, if not completely detrimental, it has zero or miserable profitability.

Akhmetov has a monopoly on the export of iron ore raw materials. He ships it through the Mariupol port. The nationalized enterprises of Akhmetov in the LDPR brought to the budget of Ukraine 2%, while the export of iron ore raw materials — 12%! If the Republics took Mariupol, Akhmetov couldn’t ship raw materials, and it would be catastrophic for his business and the budget of Ukraine.”

Q: So, Akhmetov, even after nationalization, doesn’t feel so bad?

“Today Akhmetov is actually bankrupt. In general, all oligarchs in Ukraine are actually bankrupt, except Poroshenko and Kolomoisky. With the latter everything is clear, but about Poroshenko, I will explain. Firstly, he, being President, squeezed out money from Ukraine. Secondly, through the courts he removed all his assets, including also assets from Russian banks, and didn’t pay off his loans.

As for oligarchs, all their assets were evaluated even before the war. Now they fell in price. While we have agreements with western banks: if the assets become cheaper, and the capitalization of the companies decreases, then banks can demand immediate repayment of loans. And it is by this that Rinat’s tractability during events on Maidan and after can be explained.

He has enterprises in Swiss banks, including those that were nationalized in the LDPR, to the sum of 5 billion dollars. If there was simply a blockade, it would mean bankruptcy for Akhmetov, but as there is a blockade plus nationalization, it is a classical force majeure. So he can not repay his loan, and escape bankruptcy.”

Q: But nevertheless, why didn’t he insist on sweeping away the blockade? After all, he still has a power resource.

“It isn’t so simple. According to sociological data, most Ukrainian citizens support the blockade. Here it is necessary for someone to take upon themselves the political responsibility of lifting the blockade. It seems like Poroshenko allocated time to deal with the blockade until March 15th.”

Q: And how now will the LDPR adjust the work of Akhmetov’s enterprises?

“The uniqueness of Donbass is that here iron ore is within walking distance from the coked coals. But now, as it is impossible to deliver iron ore raw materials to the Republics from near Krivoy Rog, it is necessary to bring it from Russia. It can be taken from Kursk Magnetic Anomaly (it is between Kursk and Belgorod) or from near Murmansk.

But here there is a question of rail transportation. In Ukraine special tariffs existed for the transportation of raw materials. I.e. here also it will be necessary to lower tariffs, due to the very long distance. In addition, it is necessary to resolve the issue of job security for 100,000 people who worked at these enterprises. They paid taxes to the budget of Ukraine. Moreover, a quarter or a half of the military budget of Ukraine came from their taxes.”

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