Akhmetov calls “absolute lie” Zelensky coup allegations as SCM bonds fall

Ukraine’s richest businessman Rinat Akhmetov, the sole
owner of DTEK Group (DTEKUA, DTEKOG, DTEREN) and majority owner of Metinvest
(METINV), called an “absolute lie” the allegation by president Zelensky, made
during a press marathon on Nov. 26, on the planning of a coup in Ukraine with
its initiators trying
to involve Akhmetov. “I am outraged by the spread of
this lie, no matter what the President’s motives are,” Akhmetov stated via the
SCM website, his top holding, on Nov. 26. In a separate statement, DTEK Group
commented that Zelensky’s allegations blaming the group for Ukraine’s energy
crisis are “unfair and groundless.” It reported that it takes all its efforts
to deliver scarce coal to Ukraine and increase the production of natural gas.
The group also stated that total debt of the state to DTEK “reaches over UAH 15
bln” currently.

Following Zelensky’s speech on Nov. 26, all of the
bonds of Akhmetov-related companies fell on Friday, with the biggest loser being
the bonds of DTEK Energy (DTEKUA) which fell from 56% of par to 49.6% as of
mid-day, while correcting later to 52.2%.

As another consequence of Zelensky’s marathon, this
weekend the State Investigations Bureau (DBR) initiated a pressure on Yuriy Butusov,
chief editor of cenzor.net news site, who called Zelensky a liar at the press
marathon on Nov. 26. The DBR reported in social media on Nov. 28 that it “will
study the lawfulness of the activities” of Butusov in a video which he posted
the day before (where he shot a cannon shouting “shoot Russian occupants”). Two
hours later, however, the DBR commented that the investigation has been opened
not against Butusov (as the DBR only investigates acts committed by state
officials), but “based on the facts, not against a person”.

Separately, on Nov. 29, Oleksiy Arestovych, an advisor
to Andrii Yermak, the head of the presidential office, called for government
protection for Butusov, claiming that an assassination attempt on Butusov was
being implemented in order to engineer a popular protest similar to that after
the execution of Georgiy Gongadze, pravda.com.ua reported om Nov. 29.
Arestovych also claimed that by firing the weapon, Butusov should no longer be
considered a journalist.

Alexander Paraschiy: The conflict
between Zelensky and Akhmetov is reaching new heights, though it does not mean
there is no way for them to find common ground in the future (as has happened
between Akhmetov and each of Zelensky’s predecessors). That said, we believe
the weakness of the Akhmetov-related Eurobonds is temporary and might indicate
a good entry point – though, we acknowledge that their price risk remains high.
In particular, the case of Butusov illustrates that openly calling the
president a liar can have unexpected consequences, meaning that some reaction
from the state could follow Akhmetov’s and DTEK’s statements.

The weekend initiative of the DBR, as well the
initiative of the Cabinet to fire the top manager of a state-controlled utility
in another
November weekend illustrates that state officials are ready to
implement any of Zelensky’s whims, irrespective of the logic and legality of
such moves. In other words, it seems like Zelensky’s will is dominant currently
in Ukraine’s decision making and policy making, with no containment system
being present. This trend does not look encouraging for Ukraine’s investment
case.