Ukrainian authorities used special wartime powers to seize control of five strategically important companies, all of which have ties with some of the country’s most powerful oligarchs.
The National Securities and Stock Market Commission issued an order on Sunday for securing shares in engine maker Motor Sich PJSC and public oil producer Ukrnafta PJSC, which is backed by billionaire Igor Kolomoisky. Authorities also targeted truck maker Avtokraz, industrial company Zaporizhtransformator PJSC and an oil-refining company Ukrtatnafta.
As its military seeks to press back Russia’s more than eight-month invasion of the country, Defense Minister Oleksii Reznikov said the government’s decision will help it meet military needs including maintaining fuel supply and the restoration and repair of equipment. The companies will now be managed by the Defense Ministry.
“As of today, the specified assets are managed on behalf of the state and in the interests of the entire security sector — to meet the needs of the Armed Forces and the entire defense sector,” Reznikov told reporters in Kyiv on Monday.
Prime Minister Denys Shmyhal said his government was wielding the extraordinary power in accordance with emergency legislation passed in response to the Kremlin’s Feb. 24 invasion. Oleksiy Danilov, secretary of Ukraine’s National Security and Defense Council, said the government will either return the holdings after martial law ends or offer compensation.
“These enterprises must cover the country’s needs in wartime,” Shmyhal told reporters.
Beyond Ukraine’s wartime needs, all five companies have links with some of Ukraine’s most powerful businessmen. Kolomoisky is a beneficiary owner of a minority stake in Ukrnafta, while Kostyantin Zhevago controls Avtokraz.
The co-owner of Motor Sich, Vyacheslav Bohuslayev, was detained last month by the state security service.
The government’s decision is “almost revolutionary” as an avenue to strip oligarchs of power, according to Volodymyr Fesenko, head of the Penta research institute in Kyiv.
“This decision has been foremost drive by the logic of war and the state’s security interests,” he said in a Facebook post. “But simultaneously, the logic of stripping oligarchs of power is also working here.”
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