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. Last Updated: 07/27/2016

Pinchuk: 2nd Chance for Business in Ukraine

KIEV -- Viktor Pinchuk, the tycoon son-in-law of former Ukrainian President Leonid Kuchma, said Wednesday that he was hopeful the country's new government would create a better climate for Ukrainian and foreign businesses.

Former Prime Minister Yulia Tymoshenko, who was dismissed last week by President Viktor Yushchenko along with her government, had initiated a legal battle to try to seize Pinchuk's metals factories as part of her government's review of questionable privatization deals.

Pinchuk accused Tymoshenko of using the program to wage a personal vendetta against him.

"We have now [had] a very important, very expensive lesson," Pinchuk told a group of reporters. "Now we have to go ahead. We have a second chance."

Yushchenko tapped a former economist, Yuriy Yekhanurov, to replace Tymoshenko, and announced Tuesday that he was reversing Tymoshenko's policy of reconsidering past privatization deals.

"It is never too late to win," said Pinchuk, who became the Tymoshenko government's No. 1 enemy in its bid to challenge the Kuchma era's murky business deals.

Yekhanurov "understands very well how important the investment climate is to the country, and he has a chance to stop the recession in the economy and move forward," Pinchuk said.

The government was again lowering its prognosis for GDP growth this year to 4 percent, down from the 6 to 6.5 percent predicted earlier, Interfax-Ukraine quoted acting First Deputy Prime Minister Anatoliy Kinakh as saying.

Pinchuk said he was hopeful that Yekhanurov's government would be more receptive to reaching an agreement with him over the properties it claims he bought illegally under Kuchma.

Last month, the Ukrainian government set a $2 billion starting price for a 93.2 percent stake in Ukraine's largest steel producer, Kryvorizhstal. The mill had been controlled by Pinchuk and another tycoon, Rynat Akhmetov, but a Ukrainian court ruled that its 2003 privatization was marred by numerous violations. Pinchuk still has an appeal before Ukraine's High Court and the European Court of Human Rights.

"To carry out another tender, I will not say this lightly, it is adventurism," Pinchuk said. "The property is ours. No serious investors could in principle participate in the sale of such a property." He said he was willing to reach an agreement to pay additional funds, "and if there were normal conditions, we would theoretically say 'OK' and end all court actions."

Another Pinchuk business, the Nikopol ferroalloy plant, sparked a crisis in Tymoshenko's government when she was accused of intervening to help a minority shareholder gain key management seats after a court approved the plant's renationalization.

Yushchenko described Tymoshenko's alleged mishandling of the Nikopol renationalization as "the last straw" before she was dismissed. She has denied the accusations.

Pinchuk said that while he was more hopeful now that the business climate would improve, a threat still existed, particularly with the March parliamentary elections on the horizon. Pinchuk, who is also a lawmaker, said he would be running again.

 Ukraine will auction off Kryvorizhstal on Oct. 24 as planned despite the sacking of the government that ordered its sale, Ukraine's Property Fund head said on Wednesday. "Nobody has reviewed the schedule, and it is valid," Valentyna Semenyuk told reporters after a government meeting.

 Russian billionaires Viktor Vekselberg and Alexander Abramov are backing out of a June agreement with Pinchuk to buy a majority in the Nikopol ferroalloy plant for $380 million, Bloomberg reported, citing Vedomosti.

The decision comes after a Ukrainian court last week returned control over a 50 percent plus one share stake in the company to the government.