(AP) – Ukrainian President Viktor Yushchenko told a business forum Oct. 6 that any large-scale review of old privatization deals would have led to a new carve-up of businesses based on political alliances.
“Such a policy would have resulted in the redistribution of assets between the old and the new authorities,” Yushchenko told the conference in the western city of Lviv. “It would have political undertones and would have ended in disgrace.”
He canceled the policy after dismissing the prime minister, Yulia Tymoshenko, last month. Tymoshenko had pledged to challenge many of the murky privatization deals made under former President Leonid Kuchma. The policy scared investors and led to allegations that government officials had begun lobbying on behalf of certain business interests.
Calling the policy “a big mistake,” Yushchenko told the Ukraine-European Union business forum that “the government at any level, beginning with the prime minister, must understand that business and government are partners.” Yushchenko’s address was broadcast live on Ukraine’s Channel 5.
But Yushchenko said there were cases of privatization deals so onerous that they had to be readdressed, such as the resale of the Kryvorizhstal steel mill. “It was not privatization, but the humiliation of honest business; it humiliated the government,” Yushchenko said.
The mill, Ukraine’s largest steel producer, will go back on the auction block Oct. 24 after being returned to state control. The mill was bought in 2004 by Viktor Pinchuk, the son-in-law of former President Leonid Kuchma, and another tycoon, Rinat Akhmetov, but a Ukrainian court ruled that its privatization had been conducted with numerous violations.
The government has set the starting price for the 93.2 percent stake at 10 billion hryvna ($2 billion, 1.62 billion euros) – more than double what it sold for last year.
