Interview 7/19/2022 Read 7 min

«As Ukraine becomes more European, we can get rid of oligarchy»

Ukraine’s richest man Rinat Akhmetov disputes the legitimacy of being called an oligarch, as he recently surrendered his longstanding media interests, he hasn’t been a member of parliament for many years and his business partner Vadim Novinsky resigned his political mandate as well. What follows is the full text of the written interview that he gave Corriere. Akhmetov, 55, owns System Capital Management Group (SCM), steelmaker Metinvest and the Shakhtar Donetsk Football Club, among other properties.

– Are your companies and yourself contributing to the war effort, maybe by the operation of Metinvest’s production lines?

– Since Russia’s invasion of Ukraine, SCM businesses as well as my Foundation and FC Shakhtar have thrown all their efforts to help Ukraine and Ukrainians. As of today, I have allocated €100 million in aid to Ukraine through my Foundation. Over €90 million have been already disbursed. We are helping the Ukrainian army and territorial defenders. Where possible, we work to cover the battlefront needs. Our steel mills make anti-tank hedgehogs, and we have made and donated 100,000 bulletproof vests for the defenders of Ukraine. We are helping the civilians who have suffered from the Russian aggression: we bring food and medicines. Our power engineers often risk their lives restoring power lines and helping Ukrainian cities, towns and villages return to normalcy. We are working for the victory of Ukraine, including on the economic front. Being the largest taxpayer of Ukraine we have paid €1.2 billion in taxes in the first half of 2022 alone.

 – You made a decision to withdraw from the media business in Ukraine, even as you invest in media distribution in Poland. Can you tell us how your decision came to be?

– There is only one reason behind this decision: a discriminative law on oligarchs has entered into force. This is a hard and involuntary decision, which I made with a heavy heart. We started developing media business in 2000 and the total investment in the media holding exceeded $1.5 billion. The “Ukraine” and “Ukraine 24” TV channels are the country’s broadcasting leaders. Our star team included 4,000 employees who have managed to create real media outlet, which is free, professional and interesting at the same time. With the outbreak of a large-scale war and a short six-month grace period provided for by the law for the sale of assets it became impossible for SCM to sell its large media business on market terms. The law entered into force, it was not cancelled and under the law I was obliged to give up my media assets. So I had to surrender all of the broadcasting licenses and transfer them to the state as well as discontinue electronic and print media ventures. As to the media development in Poland and other countries, the decision has not been made yet.

 – Are you concerned Gazprom might cut off supplies entirely in the event supplies to the EU will decline to near-zero too? In that case, how might Ukraine ensure its energy needs?

– As the largest private producer of coal and gas, we ensure Ukraine’s energy independence. But the upcoming winter will not be easy. We will do everything that depends on us: from providing heat and electricity to Ukrainian households to meeting energy needs. The energy problem should be the priority for the Ukrainian authorities because it is another intensive battlefront of the war. SCM companies have not bought gas from Gazprom, not a single cubic meter, neither has Ukraine since 2015.

– You own substantial industrial plants in Russian-occupied areas: can you tell us what are the plants over which you have lost control at this time and what their value is?

– Following the large-scale offensive of the Russian Federation on 24 February 2022, such plants as Azovstal, Ilyich Iron and Steel Works of Mariupol, Avdiivka Coke, Luhansk TPP, and dozens of other industrial infrastructure and green energy facilities have been partially or completely destroyed or mothballed. The pre-war capitalisation of these assets amounted to dozens of billions US dollars. The replacement cost estimates show that the losses incurred by Azovstal and Ilyich Iron and Steel Works due to Russian aggression vary from $17bn to $20bn. As the war is still going on, we can’t know the final amount of reparations, but the loss estimates stand at dozens of billions of dollars. In addition, right now the Russian Federation is cynically stealing our grain as well as steel in Mariupol. The total cost of ready-made products, raw materials, and semi-finished products stolen by Russian Federation makes about $1 billion.

 – Are you planning to sue Russia in an international commercial court? If so, how high is the claim going to be?

– I have already filed my first lawsuit against Russia with the European Court of Human Rights. The final amount of losses will be determined following additional evaluations and estimates. Also, we are pursuing international arbitration proceedings against Russia regarding the assets that have been stolen by Russia as a result of illegal annexation of Crimea. My team includes the best Ukrainian and foreign lawyers, who will use all possible mechanisms in national and international courts to hold Russia accountable and force it TO pay tens of billions of dollars in losses. Russia’s unjustified and brutal aggression against Ukraine has put a key question on the world’s agenda: the consistency, fairness and effectiveness of the global legal system created after World War 2. The question is whether it can punish an aggressor like Russia, force it to make reparations and ensure that reparations are paid in full. It іs order that makes the world go round, and it’s the inevitability of punishment for its violation that makes it work. That means we need to improve the world order.

– There is an understanding in Brussels that Ukraine’s candidate status should go along with some reforms – stronger anti-corruption and anti-money laundering checks and a law that would limit the oligarchs’ clout over the country’s economic and political life. Do you think Ukraine is ready of such reforms and the right time to pass them is now?

– The European Commission made it clear that the law on oligarchs should be implemented in a legally sound manner, taking into account the forthcoming opinion of the Venice Commission on the relevant legislation. Last year, Ukraine applied to the Venice Commission for a recommendation, but still validated the law without waiting for its final conclusions. I am sure that if a similar law existed in Italy or any other country of the free world, the courts would be inundated with absolutely fair lawsuits and complaints about the provisions of the law. The status of an EU candidate country is not just a chance to build a new European country, it is a demand of the Ukrainian people to create a free democratic European country without corruption, with a market economy, fair and independent courts, freedom of speech and a functioning institution of power. This is also a way to really get rid of the oligarchy. We won’t get another chance. It is our historical responsibility to do it now. I am confident that this is exactly what will happen.

 – How sustainable is Ukraine economically if the country does not recover the territories that are now under Russia’s control?

– We have suffered significant economic losses: we are running huge budget deficit of 35%, we have lost one fifth of our territory, half of GDP, one third of overall steelmaking capacity, 40% of grain export, energy businesses, and infrastructure facilities. And worst of all, an estimated 11 million Ukrainians have left Ukraine for neighbouring countries or become internally displaced persons. To restore economic sovereignty, we must first and foremost restore territorial sovereignty – return the territories seized by Putin’s regime. Now Ukraine’s economy is directly dependent on support from the West, and I am grateful to those who provide this support, including Italy.

 – There are calls in Europe for Ukraine to think about negotiating a ceasfire, maybe in the Autumn. Would you say such perspective would make sense?

– The war kills people, destroys our lives and ruins our future. I am for peace, but on exclusively Ukraine’s terms and conditions, which means the withdrawal of all Russian troops from the territory of Ukraine and the return of full control over those territories to Ukraine. Russia, which attacked Ukraine, is not ready for this scenario at this stage. It is important to understand that Ukraine is fighting both for its own freedom as well as for your freedom. This means that we are in this fight together, and we must win it.

Interview of Rinat Akhmetov for Corriere Della Sera.

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