8 Nov 2022 12:21

Zelensky does not rule out new state seizures of businesses

MOSCOW. Nov 8 (Interfax) - Ukrainian President Vladimir Zelensky does not rule out new decisions to seize strategic companies for the state.

"A decision was announced on certain Ukrainian companies. This decision was dictated by military necessity [...] Five strategic companies are being seized for wartime needs - Motor Sich, KrAZ, Ukrnafta, Ukrtatnafta and Zaporozhtransformator," Ukrainian media outlets quoted Zelensky as saying on Monday in a video message broadcast on YouTube.

He said some of these companies were almost not operating. "Now they will also work. For defense. This is repair and production of equipment, supplying defense forces, work to restore our infrastructure. A complex task that can only be carried out through a system of military-state management. I don't rule out other such decisions," Zelensky said.

The secretary of Ukraine's National Security and Defense Council, Alexei Danilov said at a briefing on Monday that the shares of five strategically important Ukrainian companies have been seized for the state following a decision made by the Ukrainian authorities. A video of this was posted on the Telegram channel of Prime Minister Denis Shmygal.

This referred to shares in Ukrnafta, Ukrtatnafta, Zaporozhtransformator, AvtoKrAZ and Motor Sich.

Danilov said the seized assets have become military property and their management has been handed over to the Defense Ministry. "Upon the conclusion of martial law, according to legal norms, these assets might be returned to their owners or [there will be] appropriate compensation for their value," he said.

Defense Minister Alexei Reznikov said at the same briefing that this decision was not nationalization. "This is direct seizure of property for the duration of martial law. These are absolutely different legal forms," he said.

The ministry has already formed new supervisory boards at all five companies, together with state oil and gas company Naftogaz in the case of Ukrnafta and Ukrtatnafta, Reznikov said.

Naftogaz owns the controlling stake in Ukrnafta, and the Privat Group of Igor Kolomoisky and Gennady Bogolyubov holds about 42%. At Ukrtatnafta (Kremenchug Oil Refinery) the situation is reversed.

The circulation of all shares in Motor Sich, the largest shareholder of which was the company's recently arrested president Vyacheslav Boguslayev, has been blocked since April 2018 after a controlling stake was sold a year earlier to China's Skyrizon and affiliated parties.

AvtoKrAZ and Zaporozhtransformator, which were controlled by Konstantin Zhevago and Konstantin Gigorishin, respectively, have been in bankruptcy proceedings in recent years.