Ukraine’s richest man doesn’t want to be called an oligarch anymore. For that, he’s ready to publicly distance himself from politics and relinquish his sway over the domestic media market.
Rinat Akhmetov, who owns System Capital Management (SCM), the country’s largest holding and the bulk of his $4.5 billion fortune, announced on July 11 that he would transfer the broadcasting licenses of his company Media Group Ukraine, valued at $200 million, to the state.
"As the largest private investor in Ukraine, I have repeatedly said that I was not, am not, and will not be an oligarch," Akhmetov said, calling the move a “forced decision.”
Akhmetov chose to hand over his media empire’s licenses in a bid to escape being registered as an oligarch under the so-called anti-oligarchic law signed by President Volodymyr Zelensky in November. The law came into effect on July 1.
Under the law, oligarchs are subject to restrictions such as a ban on financing political parties and involvement in the privatization of state property. They have to account for their earnings, and officials are banned from holding off-the-record meetings with them.
But there’s a catch.
SCM still owns the assets of Media Group Ukraine, including those of Ukraina and Ukraina 24 TV channels, the most-watched channels in the country.
Media Group Ukraine has also launched broadcasting in Poland via satellite, with their primary focus set on delivering information to Ukrainians within Ukraine and abroad.
Now, Ukrainian experts and officials are split on whether Akhmetov can be considered an oligarch.
Justice Ministry Denys Maliuska says that, technically, Ukraine’s richest man is not an oligarch after forfeiting his licenses and his business partner Vadym Novinsky giving up his parliament seat.
Old empire, new structure
In November 2021, Zelensky introduced a law set to launch the so-called “de-oligarchization.”
The law defined an “oligarch” as an individual who is in control of a monopoly, has media assets, has a net worth of over $90 million, and participates in “political activities.”
To be officially labeled by the state as an oligarch, the individual must tick at least three of the four criteria.
The law also introduces an “oligarch registrar,” which is filled by the National Security and Defense Council.
According to Oleksiy Danilov, secretary of the National Security and Defense Council, 86 people fall under at least one category.
These are the people that can potentially be included in the registrar of people widely considered to have a disproportionate influence over the fate of the country and its economy, he added.
Natalia Yemchenko, the head of communications at SCM, said that the holding had no other choice than to comply with the law, and exit media business in Ukraine. She claimed that she was surprised that the law was signed.
“We thought there wouldn’t be any witch hunts,” she told the Kyiv Independent.
As a pre-emptive measure, Akhmetov’s business partner Novinsky, who is a minority share owner of Akhmetov’s Metinvest steel and mining holding, resigned his seat in parliament on July 6.
Novinsky said that he will be “more effective not in politics, but humanitarian, social, industrial and economic activities.” According to the Slovo i Dilo parliament monitoring organization, Novinsky fulfilled zero campaign promises and was among the biggest no-shows in parliament.
Meanwhile, Yemchenko insisted that Akhmetov’s SCM group had every intention of following the law by giving up licenses. “For us, the law is above all,” she said.
Akhmetov chose to transfer the licenses to the state, but the assets still belong to Media Group Ukraine, including corporate rights and the channels’ properties.
"We will return to the state only what belongs to the state – that is, the licenses for broadcasting,” Yemchenko said. “We will not transfer any other assets of the media group to the state."
On the same day as Akhmetov announced giving back licenses to the state, Media Group Ukraine launched a package of Ukrainian channels in Poland through the largest Polish telecommunications provider Cyfrowy Polsat.
Oksana Romaniuk, the head of the Institute of Mass Information (IMI), a media watchdog, is convinced that Media Group Ukraine will continue working as a media holding registered somewhere outside Ukraine, and focused on online channels of distribution.
“We predicted that hiding the structure of ownership would be the main result of the law on oligarchs,” Romaniuk told the Kyiv Independent. “It was inevitable.”
Romaniuk said Akhmetov made a proactive step to avoid restrictions, and regulations, resume control over contents and become more financially sustainable.
She says that a Ukrainian law regulates ownership rights only in Ukraine and, thus, Akhmetov now doesn’t have a media empire, according to the law.
However, the law doesn’t officially mention that a potential oligarch is limited to owning media in Ukraine, with the legal framework being vague.
Meanwhile, SCM said on July 15 that each employee of Media Group Ukraine will receive severance pay in the amount of 3 to 12 monthly salaries in case of lay-offs.
The Kyiv Independent reached out to employees of Ukraina 24, who declined to comment.
Besides the SCM holding, the 55-year-old business tycoon is the owner of Ukraine’s largest private energy provider DTEK, and Ukraine’s leading football team Shakhtar Donetsk.
Akhmetov’s fortune took a big hit with Russia’s invasion on Feb. 24.
According to Forbes, Akhmetov lost $3.1 billion from his $7.6 billion fortune throughout 2022, mainly due to Russia’s war against Ukraine, which devastated eastern Ukraine, the heart of the oligarch’s business empire.
Through his heavy industry giant Metinvest, Akhmetov owns Azovstal, the steel mill that gained worldwide notoriety during heroic Ukraine’s defense of Mariupol, in southeast Ukraine.
Before Feb. 24, this gigantic complex used to generate tens of thousands of jobs, producing 40% of the country’s steel and shipping it using its own port on the Azov Sea.
The behemoth, one of the sources of Akhmetov’s fortune, is now completely destroyed by Russia and is under the Kremlin’s control.
Akhmetov sued the Kremlin for up to $20 billion in losses for the destruction of his assets in Mariupol and other parts of the Donbas.
So is Akhmetov an oligarch?
Oleksandr Lemenov, an anti-corruption activist and law enforcement expert, says the anti-oligarch law is irrelevant at the moment, because the war is destroying the term “oligarch,” their economic and political influence.
“It was not about finances, it’s about politics,” he told the Kyiv Independent.
The oligarchs had already lost their media influence, when the state introduced a “united marathon” broadcasting, forcing all Ukrainian TV channels to merge their streaming.
All mainstream channels in Ukraine are forced to air the “united marathon” instead of their regular programming amid the martial law, in place since Russia launched its full-scale invasion on Feb. 24.
Since several top officials, including Danilov and presidential advisor Mykhailo Podolyak, praised Akhmetov’s decision to give up his broadcasting licenses, Lemenov believes some sort of agreement could have been reached between the oligarch and the state.
Lemenov didn’t provide details to his claims. He pointed out how the criteria for oligarchs can be so murky
“We have oligarchs, but at the same time, we don’t have oligarchs,” he said.
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