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

29 November 2021

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.