Oligarch Rinat Akhmetov, the richest person in Ukraine, remains the sole owner of the country’s telecom giant Ukrtelecom after the State Property Fund lost an appeal in an investment dispute in Kyiv’s Economic Court.
The court made that decision on Feb. 26, but published it only on March 22.
The State Property Fund accused billionaire Akhmetov of investing too little money in Ukrtelecom after he purchased it from the government in 2011, and thus violating the privatization agreement. Akhmetov was to have invested $450 million in building up Ukrtelecom’s network over five years, but never did.
By proving Akhmetov has failed to meet the agreement commitment, the state aimed to re-nationalize Ukrtelecom, the country’s monopoly fixed-phone operator.
Akhmetov argued that investing $450 million into the company was not an obligation when his firm ESU privatized Ukrtelecom — it was just a potential plan presented to the parties.
The parties have been battling in the courts since the beginning of 2017, and the oligarch has won for now.
Two years ago it was the State Property Fund that was the winner, when in October 2017 the same Kyiv Economic Court decided to nullify the privatization contract. Ukrtelecom was to be handed back to the state and Akhmetov was to pay a fine of $82 million.
The Pechersk Kyiv Court even arrested Akhmetov’s shares in Ukrtelecom, and following a suit, the District Court of Nicosia in Cyprus issued an order in December 2017 to freeze the businessman’s Cyprus-based assets (up to $820 million).
But the oligarch appealed. As a result, the Supreme Economic Court suspended the re-nationalization during the summer of 2018. Akhmetov’s frozen assets gradually unfroze.
It’s now unknown if the State Property Fund is going to appeal again, and the billionaire continues to own Ukrtelecom through his SCM Holding.
Telecom group ESU privatized Ukrtelecom in 2011 for $1.3 billion. In 2013, Akhmetov bought ESU with its stake in Ukrtelecom through his System Capital Management (SCM) Holding. Reportedly he paid $1 billion. Today he owns both ESU and Ukrtelekom.
Ukrtelecom’s revenues in 2018 were $240 million, while its profit was $18 million. The company employs 24,000 people.
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