Ukraine's oligarchs, a hidden threat for the regime

Written By Unknown on Senin, 09 Desember 2013 | 21.51

KIEV: Ukraine's powerful oligarchs have been keeping quiet in public during the pro-EU rallies rocking the country but they could pose as great a danger to the future of President Viktor Yanukovych's regime as the protesters themselves.

The demonstrations have coincided with an apparently bitter power struggle inside Yanukovych's inner circle between older tycoons traditionally loyal to his Regions Party and a group of younger businessmen known as the "Family".

And it is this traditional oligarch group — embittered by the rise of the "Family" — who may be breaking ranks with Yanukovych over the protests.

While these "old" oligarchs have refrained from publicly backing the protests, it has escaped the notice of few in Ukraine that their television channels have given full and relatively balanced coverage of the demonstrations.

The Inter channel, co-owned by chemicals tycoon Dmytro Firtash, as well as the Ukraina channel of Rinat Akhmetov, the country's richest man and the owner of the hugely successful Shakhtar Donetsk football side, have both given substantial airtime to Yanukovych's opponents.

"All channels that belong to the 'old' oligarchs more or less had a full and objective coverage of events," said media commentator Natalia Ligacheva.

"This leads one to suppose that some oligarchs could support changes in the country," she added.

In another sign of increasing tensions within Yanukovych's inner circle, the co-owner of Inter, presidential chief of staff and key Firtash ally Sergiy Lyovochkin, even resigned after a police crackdown on the demonstrations on November 30.

But the resignation was not accepted. The Inter channel has also made a clear effort to promote world boxing champion turned politician and opposition leader Vitali Klitschko, repeatedly showing his sporting triumphs along with his political activity on the streets.

Unlike in Russia, where the political power of oligarchs was emasculated by the prosecution of its former richest man and Kremlin critic Mikhail Khodorkovsky, tycoons still wield huge power in Ukraine.

Another influential businessman, pipeline magnate Viktor Pinchuk, has also rejected stifling the voices of staff at his media holding, including the ICTV, STB and Novyi TV channels.

Ukraine's second president Leonid Kuchma — an influential figure who is Pinchuk's father-in-law — last week co-authored a declaration along with two other ex-heads of state supporting the protests.

"This gesture could be interpreted as a warning or a challenge from the old oligarchs," said political analyst Taras Berezovets, director of Communications Group Berta.

The continued power of Ukraine's oligarchs stems from the checks and balance system created by Kuchma in his 1994-2005 presidency, which was sustained up to Yanukovych's rise to power in 2010.

But the emergence of a new politico-financial clan — the "Family" — has sent shockwaves through the old system.

Yanukovych's eldest son Olexander, 40, became the central figure of the clan and his fortune of over $500 million makes him one of Ukraine's richest men, according to the Ukrainian edition of Forbes magazine.

Other members include First Deputy Prime Minister Sergiy Arbuzov, 37, and the Interior Minister Vitaliy Zakharchenko, accused by the opposition of being responsible for the police violence towards protesters.

But the most prominent member of this clan is the so-called "golden boy" Sergiy Kurchenko, just 28, an oil tycoon whose rise the opposition alleges cannot be traced back to his ability alone.

He bought the Forbes Ukraine magazine after it published a critical investigation of his activities. The editor and many journalists resigned in protest.

In this new configuration, mining tycoon Akhmetov, still the main sponsor of Yanukovych's Regions Party, could became a minority partner in the "Family", said Berezovets.

Although the "old" oligarchs are keeping to a low level of protest, the situation could quickly change if the dispute persists, analysts say.

"The oligarchs are not hurrying to openly support the protests, that would be a big risk for even the most powerful," said political analyst Volodymyr Fesenko.

But economic expert Olexander Zholud said he "cannot exclude an open conflict" between "old oligarchs" and the Yanukovych-Kurchenko group.

"The rebellion has not been silenced and their negative emotions are still expressed while the challenge grows," said Berezovets.


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