Page 41 - bne_December 2018_20181207

bne December 2018 Eastern Europe I 41
garch Victor Pinchuk, who owns holding Interpipe. Pinchuk is married to Olena Pinchuk, the daughter of ex-president Leonid Kuchma.
Among other targeted businessmen is ex-owner of nationalised PrivatBank Hennady Bogolyubov. At the same time, Moscow avoided blacklisting his busi- ness partner, Ukraine’s controversial oligarch Ihor Kolomoisky, who is locked in bitter legal disputes with Moscow over his losses in annexed Crimea.
Among other targeted businessmen
are Oleksandr Yaroslavsky (DCH group of companies), Konstantin Grigorishin (Energy Standard Group), Andriy Verevsky (Kernel) and Yuriy Kosiuk (MHP), Vitaliy Antonov (OKKO), Olek- siy Vadatursky (Nibulon), Oleksandr Hereha (Epicenter and Nova Linia), Filia Zhebrovska (Farmak), Hlib Zahoriy (Darnitsa), Stepan Ivakhiv (WOG), Volodymyr Kostelman (Fozzy Food), Roman Chihir (Fozzy Group), Oleh Sotnikov (Fozzy Group), Leonid Yuru- shev (Unibudinvest), Roman Matsola (First Private Brewery), and Pavlo
Fuks (Ukrrosleasing).
Some heads of the largest private holdings were also placed on the list, specifically, Metinvest CEO Yuriy Ryzhenkov, Smart Holding CEO Oleksiy Pertin, StarLightMedia CEO Volodymyr Borodiansky and SCM CEO Oleh Popov.
"Can't scare a hedgehog with
a derriere"
Russia also blacklisted former Ukrainian prime ministers Yulia Tymoshenko and Arseniy Yatsenyuk. Tymoshenko is cur- rently the front runner to win next year’s
sia that lead to Ukraine paying some of the highest prices in Europe for gas.
Among the incumbent officials who were included to the list are the Interior Minister Arsen Avakov and National Security and Defence Council (NSDC) Secretary Oleksandr Turchynov.
The latter said the same day that “Moscow can't scare hedgehogs with their bare derrieres". "This is the only comment I can give about Russian sanctions against Ukraine," Turchyn- ov wrote on his official Facebook page.
Meanwhile, Poroshenko's press spokes- man Svyatoslav Tsegolko described Russia's sanctions on a number of Ukrainian individuals and legal entities as recognition of the Ukrainian presi- dent's and his team's efforts to oppose Russia's aggression toward Ukraine.
Domestic political impact
Timothy Ash, a senior sovereign strategist at BlueBay Asset Management, believes that the sanctions unlikely to have any "meaningful economic impact", as the volumes of trade with Russia have collapsed four- or five-fold since 2014.
"I also assume that few of the companies of individuals sanctioned have much meaningful business these days with Russia," he wrote in a note to clients on November 1.
More interesting is the Ukrainian domes- tic political impact, Ash believes. "Mos- cow has consistently misread Ukrainian domestic politics in recent years, and miscalculated time and again [...], but this will impart a terminal blow to any politician inclined to a more moderate
to get thru to the second round of the presidential contest in March."
Meanwile, Zenon Zawada at Kyiv-based brokerage Concorde Capital wrote in
a note on November 1 that among the businesses targeted, we see some minor impact on the business of sunflower oil producer and grain trader Kernel, which received $7.8mn in income last year - from a Russian port it partially owns.
"The sanctions will further hurt the busi- ness of Interpipe, but not by much after Russia hiked import duties for railcar wheels in January. That is likely to have further cut away at Russia’s 15-20% share of Interpipe’s 2017 revenue," he added.
"With this list, the Kremlin is clearly delineating for the public who are its enemies among the Ukrainian political and business elite," he added. "Notice- ably, it excludes Ukraine’s leading Rus- sian-oriented politicians and oligarchs, including billionaire Vadim Novinsky, Motor Sich Chairman Viacheslav Boguslayev, Opposition Bloc Head Yuriy Boyko, Akhmetov ally MP Oleksandr Vilkul and gas trader Dmytro Firtash."
At the same time, there are a few notable exceptions to this rule, Zawada added. "The list does not include Presi- dent Poroshenko and his ally, billionaire Rinat Akhmetov," he wrote. "Instead,
it includes the president’s eldest son, Oleksiy. The list also excludes other top officials, such as Prime Minister Volody- myr Groysman and Foreign Minister Pavlo Klimkin. But it includes leading presidential contender Tymoshenko."
Zawada believes that this is a deliber- ate Kremlin tactic to give Poroshenko’s leading political opponent, Tymoshenko, an electoral "boost". "She will waste no time in using this list to prove that Poro- shenko is the truly Kremlin ally, rather than her," the expert added. "It’s widely suspected that Poroshenko has tacit business agreements with Putin, and that both are profiting from the war."
“With this list, the Kremlin is clearly delineating for the public who are its enemies among the Ukrainian political and business elite”
presidential election and including her in the sanctions list is probably a boon to her campaign, as she is seen as too close to Moscow by some. While prime minis- ter Tymoshenko negotiated what turned out to be a disastrous gas deal with Rus-
stance towards Russia in the looming presidential elections," he wrote. "Therein the [pro-Russian] Opposition Bloc leader, Yuriy Boiko, has in effect been cast off by Moscow by this move, albeit he always seemed very unlikely
www.bne.eu