Ukrainian government is depriving the private property market: investors ask EU countries for protection

Saturday, 03 December 2016 16:51
Viktor Misura

Viktor Misura is a Kiev based business analyst

After the victory of the “Revolution of Dignity” in Ukraine, the Ukranian business community and its entrepreneurs expected the state to decrease regulations. However instead of improving the investment climate, a wave of hostile takeover have spread over the past two years across the country. Most of them also involving high-level officials.
This year more than 2,000 companies have suffered from hostile raiders already. Some larger examples include the hostile take-overs of the stevedoring company "Transinvestservice" and the chocolate factory "Zhytomyrski lasoshchi". The greatest attention however was paid to the hostile takeover of the national oil operator "BRSM-NAFTA", a foreign investment company, which runs hundreds of filling stations throughout Ukraine.

As the take-over was unfolding, a meeting of the Ukrainian Cabinet of Ministers was held on November 30 and thousands of "BRSM-NAFTA" employees and family members were demonstrating outside the cabinet. They urged to  Volodymyr Groysman, the Head of Government to resign Roman Nasirov as Head of the State for Fiscal Services and to take measures to prevent the destruction of "BRSM-NAFTA" by raiders who are backed by criminal officials. Protesters held posters with various slogans: "Mr. President! Please protect us from raider Nasirov!","Nasirov destroys private property!" and "Families of "BRSM-NAFTA" employees are demanding to quit Nasirov!".

The situation related to the protest of "BRSM-NAFTA" employees somehow resembles the Maidan protest: Fiscal authorities destroying private property, and people losing everything they have and even perishing during the hostile takeovers, employees picketing the authorities and asking Embassies and European countries for protection, while police and prosecutors "close their eyes" to the hostile takeover in which the Head of the State Fiscal Service has been involved.

Raiders have been trying to deprive the property of "BRSM-NAFTA" company for nearly three years. At first, trotyl explosions took place at filling stations, explosives were found at the enterprises. The raiders caused the greatest impact on the enterprise with a downright terrorist attack when one petroleum-storage depot was blasted in Kiev region. At least 12 people have been killed but these crimes have not been investigated.

Today thousands of people are asking the government, "how many more people must die in the hostile takeover of "BRSM-NAFTA" until such hostile takeovers on the part of the Government and Prosecutor General's Office will finally cease?” Who will be responsible for further victims due to the raiders actions?", Oleksander Melnychuk, director of the strategic marketing department of "State Oil" Company which is a management company and network of the "BRSM-Nafta" filling stations commented on the event.

Employees in organized groups proceeded from the Government`s building and continued to protest near the Prosecutor General`s Office of Ukraine. Thousands of people gathered near the office, but the Prosecutor-General did not approach the employees who had arrived from all over Ukraine, working for one of Ukraine’s largest companies. With everyone concerned because they cannot get to their jobs.

Near the Prosecutor General's Office, people are giving interviews to Ukrainian and foreign journalists. They feel that the government destroy their jobs, women cry and men promise to begin an indefinite hunger strike next to the Presidential Administration of Ukraine. At the protest speakers say that they believe that President Petro Poroshenko, being a former businessman, felt the pressure made by the fiscal service and so he should understand how the raiders are destroying "BRSM-NAFTA" company. Most of the protesters are asking foreign Embassies especially from EU member countries to save the company from the takeover.

ukrstationfilling
One of the many filling stations throughout Ukraine 

"We have big hopes that we will be heard in Europe. When the government makes announcements about the prospects for a visa-free regime, we primarily do not want such a formality, but real implementation of European values in Ukraine ​​when the right to private property is inviolable", representatives of the network of filling stations stated.

"BRSM-NAFTA" has won all legal actions against the State Fiscal Service, under which the fiscals have to leave enterprises of the company and return all property. But the court decision has not been performed by the head of fiscal service Roman Nasirov. Although the fiscal service recognizes that "BRSM-NAFTA" with its foreign investments is in the list of the hundred largest taxpayer’s in Ukraine.

In Ukraine there are fears that the "BRSM-NAFTA" takeover will damage the country’s international image and destroy prospects to attract European investors to Ukraine. In a communique, the press service of "BRSM-NAFTA" released a comment made by Igor Revko, a US citizen, and founder of "State Oil" company. "On November 1st, the Prosecutor-General of Ukraine Yuriy Lutsenko frankly and openly, through his Facebook-page, gave the command to kill my company. In fact, he called to nationalize private business with foreign investments. This is a blow under the belt for all investment attractiveness of Ukraine. No investor in the world will invest money in the country where the government nationalizes private property."

While "BRSM-NAFTA" incurs losses every day, the government is not in a hurry to protect the private property. Can Europe help Ukraine and protect the values ​​which are being violated? Currently, the question is open and primarily depends on the European Union decision makers.

By Viktor Misura
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