Ukraine tycoon Ihor Kolomoisky named suspect in fraud probe

Two lawmakers - Yaroslav Zheleznyak and Iryna Gerashchenko - suggested on Telegram that the move against Kolomoisky was aimed at generating positive publicity among Ukraine's foreign backers.

Ukrainian business tycoon and one of Ukraine's most prominent billionaires Ihor Kolomoisky speaks with Security Service of Ukraine (SBU) and Prosecutor General's Office officers at an unknown location, in this picture released on September 2, 2023 (photo credit: State Security Service of Ukraine/Handout via REUTERS)
Ukrainian business tycoon and one of Ukraine's most prominent billionaires Ihor Kolomoisky speaks with Security Service of Ukraine (SBU) and Prosecutor General's Office officers at an unknown location, in this picture released on September 2, 2023
(photo credit: State Security Service of Ukraine/Handout via REUTERS)

Ukraine's main security agency accused tycoon Ihor Kolomoisky of fraud and money laundering on Saturday, naming one of the country's most prominent businessmen a suspect in a criminal investigation.

The move against Kolomoisky, one of Ukraine's richest men and a one-time supporter of President Volodymyr Zelensky whose election he backed in 2019, comes as Kyiv is trying to signal progress during a wartime crackdown on corruption.

"It was established that during 2013-2020, Ihor Kolomoisky legalized more than half a billion hryvnias ($14 million) by withdrawing them abroad and using the infrastructure of banks under (his) control," the Security Service of Ukraine (SBU) said in a statement.

Kolomoisky, who has previously denied allegations of wrongdoing, could not be reached for comment.

The SBU published pictures on the Telegram messaging app of a group of detectives at the door of his home, with Kolomoisky being served documents and signing them.

Ukrainian business tycoon Ihor Kolomoisky attends the Yalta European Strategy (YES) annual meeting in Kiev, Ukraine September 13, 2019. (credit: VALENTYN OGIRENKO/REUTERS)
Ukrainian business tycoon Ihor Kolomoisky attends the Yalta European Strategy (YES) annual meeting in Kiev, Ukraine September 13, 2019. (credit: VALENTYN OGIRENKO/REUTERS)

The businessman, who has been under US sanctions since 2021, is seen as one of the class of oligarchs who amassed huge industrial wealth after the 1991 collapse of the Soviet Union and have wielded outsize political and economic influence.

Before Russia's invasion of Ukraine in February last year, Zelensky and his team tried to clip their wings with legislation requiring oligarchs to register and stay out of politics.

The war has eroded their power as lucrative industrial assets have been destroyed in the east and south, and their television channels have been broadcasting under a centralized wartime signal.

Before he won the presidency, Zelensky rose to prominence as a comedian and played the role of president on a show aired on a Kolomoisky-owned TV channel. He denies Kolomoisky has had any influence over the government.

 Crackdown on corruption

During the war, Zelensky has been keen to stress Ukraine's crackdown on corruption as Kyiv has applied to join the European Union. It hopes to secure tens of billions of dollars to help rebuild the country after 18 months of war that has no end in sight.

Western governments will not want to pour in funds to rebuild the country if they think are lining the pockets of oligarchs.

Two lawmakers - Yaroslav Zheleznyak and Iryna Gerashchenko - suggested on Telegram that the move against Kolomoisky was aimed at generating positive publicity among Ukraine's foreign backers as well as the public at home who are tired of the war and worried about the problem of graft.

The SBU's announcement on Saturday is not the first wartime move involving Kolomoisky.

In November last year, the state took control of stakes in major strategic companies, some of which were associated with him, invoking wartime laws to help the war effort.

Earlier this year security officials searched Kolomoisky's home in connection with a separate investigation into embezzlement and tax evasion at the country's two largest oil companies that were partially owned by the businessman.

Kolomoisky is a former owner of leading Ukrainian bank PrivatBank, which was nationalized in late 2016 as part of a major clean-up of the banking system.

He has owned an array of assets in the energy, banking, and other sector, including one of Ukraine's most influential television channels.

The United States imposed sanctions on Kolomoisky in 2021 "due to his involvement in significant corruption." US authorities have also alleged Kolomoisky and a business partner laundered stolen funds through the United States. Kolomoisky has denied any wrongdoing. ($1 = 36.5686 hryvnias)