"Lost" Ukrainian oligarchs

A week after Russian troops invaded Ukraine and marched on Kiev, a group of Ukrainian volunteers occupied a luxury house near the capital to make a makeshift dispensary and hospital. The house belongs to Viktor Pinchuk, one of the richest Ukrainians, who, like many other billionaires, left the country at the very beginning of the war.

Pinchuk, who came to Ukraine after that, initially allowed the activists to use his villa. however, a war is being waged and everyone should contribute. However, the volunteers stayed longer than desirable and refuse to leave. They invited the local media to record their takeover of the luxury property.

"We will stay here until victory," activist leader Henadiy Druzenko told the "Ukrainian Pravda" portal.

The occupation of Pinchuk's villa clearly shows how the war is changing the state of affairs for Ukraine's business elite, which played a key role in the country's resistance to Russian aggression in 2014, which then established its political influence and financial interests. Eight years later, members of the business elite have become marginalized, and their economic influence is fading.

"I get the impression that they are lost," said Timofij Milovanov, former Minister of Economy. "They have no idea what to do".

The day before Russia launched a general invasion, on February 23, President Volodymyr Zelensky called the most powerful businessmen into his cabinet. Individuals like Pinchuk and Rinat Akhmetov, the richest man in Ukraine, came to Ukraine just for that meeting.

While the President of Russia read a book to the Russian oligarchs at a similar meeting in the Kremlin the following day, the meeting with Zelensky was more pleasant, and all the guests sat at the same table. However, the message was similar: stand by your leader in times of war.

The two who attended the meeting said that Zelenski invited them to put aside their rivalry and unite in the defense of the state, no less.

It was a far cry from the atmosphere in 2014, when Ukraine's oligarchs led the state's response after Russia annexed Crimea and then laid a paw on a sizable chunk of the eastern Donbass region in a proxy separatist war.

Because an extremely poorly equipped and undermanned army was caught off guard, the business elite financed battalions of volunteers to join the fight. Several oligarchs were appointed governors of volatile Russophone regions where Moscow was trying to provoke other separatist uprisings.

Ihor Kolomoisky, co-owner of a diverse business empire that includes banking, iron alloys and media, has been appointed governor of his native Dnipropetrovsk region, which borders the breakaway Donbass. He supported several volunteer fighting groups to suppress domestic pro-Russian movements, and later engaged in fighting in the Donbass.

Serhiy Taruta, a steel tycoon, was appointed governor of Donetsk region, and Oleksandr Yaroslavsky was appointed head of Kharkiv, Ukraine's second largest city. They used their authority, resources and media power to mobilize the population against Russia's attempt to destabilize and disintegrate the country.

Others, like Akhmetov, who previously supported ousted President Viktor Yanukovych's pro-Moscow Party of Regions, sided with Kyiv.

Eight years later when Ukraine's military is well-trained and battle-hardened and in a much better position to resist, Ukraine's oligarchs are playing a much more passive role in national defense - donating money and supplies like millions of their countrymen. Someone said they were raising funds for the war effort, like everyone else was doing.

Akhmetov and Pinchuk launched a PR campaign to gain recognition for their philanthropic efforts.

Others, like Kolomoisky, who provided Zelensky with key support during the presidential campaign, are mysteriously absent. Even Dmytro Firtash, the exiled gas tycoon wanted on corruption charges in the US and once considered close to the Kremlin, has said he wants to return to Ukraine to help the war effort.

Akhmetov said that he had allocated 100 million euros of humanitarian aid and support for the Ukrainian army and that he had "adjusted business to wartime conditions to the greatest extent possible."

"The key task for us now is to help Ukraine survive, to win," he said in an email. "It is already crystal clear that both our business and our country are suffering huge losses due to the war".

Like other tycoons whose business empires stem from assets in Ukraine's industrial east - now at the center of the war - Akhmetov has suffered a severe blow. He is suing the Russian government for $20 billion over losses at two huge steel mills in Mariupol, including the Azovstal steel mill that was destroyed in the Russian attack.

The oligarchs have also lost political influence. Their television channels broadcast the same government sentences about the war, according to broadcasting conditions and censorship. Meanwhile, Zelensky, who angered tycoons last year when he passed a law against oligarchs that reduced their political influence, is growing in popularity and authority.

Oleksej Danilov, Zelenskiy's national security adviser who played a significant role in efforts to curb the influence of the oligarchs, told the Financial Times that since the beginning of the Russian invasion, they had behaved in "various ways" and hinted that some of them could bear responsibility after the end of the war.

Ukraine's wealthy industrialists are likely to find new business opportunities in the gigantic reconstruction task that will be financed by hundreds of billions of dollars in Western aid. Some are also expected to apply for compensation from the government for factories and plants destroyed in the war.

However, Western donors are likely to demand reforms and tougher anti-corruption measures in exchange for financing Ukraine's reconstruction efforts, which could further limit the power of the leading business elite.

"There is a view that Ukraine will not be resistant to Russian aggression unless it is cleaned from within," said Orisija Lutsevich, head of the Ukraine program at Chatham House, an organization in London. "The oligarchs will not have the same power they had after independence".

Konstantin Grigoryshyn, an energy and metals tycoon who has lost several corporate battles with more powerful oligarchs, said that Ukraine's political system needs deep reform to prevent the biggest tycoons from usurping the economy for their own benefit.

"It will require a lot of discipline and intellectual skill," Grigorisin said.

Translation: N. Bogetić