Ukraine challenges oligarchs' grip on energy companies

By Richard Balmforth and Natalia Zinets KIEV (Reuters) - Ukraine's judicial authorities launched actions on Tuesday challenging tenders that gave big businessmen control over key power companies under ousted president Viktor Yanukovich in a new move by the government to curb the influence of the so-called oligarchs. The legal actions targeted the 2012 and 2013 sell-offs of electricity-generating companies in eastern Ukraine to holdings of multi-billionaire Rinat Akhmetov and a close associate, and of a power distributor in the west of the country. State assets in Dniproenergo and Donbasenergo, which feed the national power grid, and one of the main power distributors in the Zakarpatya region, were sold off for low prices in non-competitive tenders in which only a few favoured participants took part, the general prosecutor's office said in a statement. "These privatisations ... were drawn up in such a way as to artificially create the conditions for acquisition of the state assets by specific individuals which significantly narrowed down the circle of potential purchasers," it said. The move against Ahmetov, Ukraine's richest man who made a multi-billion dollar fortune in steel and energy in the early days of independence, and other oligarchs close to the disgraced Yanukovich, appeared to be part of concerted moves by the pro-Western leadership to end cronyism and break the influence of the super-wealthy on political life. President Petro Poroshenko fired an opening shot by sacking tycoon Ihor Kolomoisky as governor of Dnipropetrovsk region late last month for sending armed men into the Kiev offices of Ukraine's state-owned oil pipeline operator, Ukrtransnafta, after a move to bring in legislation that will put a brake on his commercial interests in the oil industry. "DE-OLIGARCHISATION" Poroshenko, who is under pressure from Western financial institutions and potential donor governments to clean up Ukraine's act in exchange for bail-out money, has since announced a campaign to clip the wings of oligarchs who use their wallets to buy influence in parliament and government. He appears to have set his sights on breaking up their dominance of the gas industry, which has been the battleground for competing oligarch interests ever since independence from the Soviet Union in 1991. Some deputies are pushing for legislation that will curb the power of another tycoon, Dmytro Firtash, the owner of Group DF. Though his star has waned since he was arrested in Vienna a year ago at the FBI's request on charges of bribery, Firtash still controls an empire, built up under Yanukovich, in which he has huge control over Ukraine's regional gas distribution network. "They (the oligarchs) want chaos, not order. I want the de-oligarchisation of the country," Poroshenko told Channel 5 television on Saturday, emphasising the need for transparency to dispel the murkiness of Ukraine's business life. Akhmetov's DTEK company paid $147 million for 25 percent of Dniproenergo's state assets in 2012, two years after Yanukovich was elected, to boost his extensive holdings in the energy and steel sectors. Control over Donbasenergo went to Ihor Gumenyuk, a friend of Akhmetov's and member of Yanukovich's Regions party, in a tender in 2013 in which his Energoinvest Holding snapped up 61 percent of the state share for $90 million. Half of the state share in the Zakarpatya power distributor was sold off in early 2012 for about $18 million, only slightly above the opening price, to a company run by Russian businessmen. (Additional reporting by Pavel Polityuk; Editing by Giles Elgood)