Tuesday, 12 October 2010

Thinking of investing in Ukraine #2

Here’s a salutary story.

In central Ukraine there is a steel mill that was originally owned by the state.

Messrs Rinat Akhmetov and Viktor Pinchuk almost bought the mill for $800 million.

In 2005 President Viktor Yushchenko and Prime Minister Yulia Tymoshenko auctioned it off what was widely regarded as an open and honest transaction to the pan global steel company ArcelorMittal for the heady sum of $4.8 billion.

Today state prosecutors are claiming the new owners have not met their investment commitments.

Many observers believe this is the first steps in how the government will take the plant back and subsequently sell it off to favoured friends of the party.