Ukraine law enforcement searches Smart Holding offices

The Security Service of Ukraine and the Prosecutor General’s Office conducted a special operation on Sept. 25 in a criminal case opened against Smart Holding of tycoon Vadim Novinsky. The holding is a minority shareholder of Metinvest (METINV). The criminal case was opened for suspicion the company played a role in driving the Okean Shipbuilding Plant in Mykolayiv to bankruptcy. Involving 150 SBU officers and 45 prosecution officers, the special operation consisted of 23 searches of the company’s offices and confiscating relevant materials, the Prosecutor General’s Office reported on its website.

The search of the Kyiv office involved a forced entry on a Sunday, which is illegal, said a Smart Holding spokeswoman, as reported by the Ukrainian News agency. It was the second such search after the first attempt in late July. It also followed the Sept. 12 announcement by presidential advisor Yuriy Biriukov that a Kyiv district court issued a ruling confiscating the Okean factory from Novinsky.

Zenon Zawada: Any such searches of a high-profile business, controlled by a high-profile businessman such as Novinsky, have their roots in politics. A former Russian citizen who became a Ukrainian in 2012, Novinsky is a supporter of the Russian-oriented Opposition Bloc. He’s not the first Opposition Bloc member to draw the government’s attention after the Prosecutor General’s Office announced on Sept. 22 it will ask parliament to remove prosecutorial immunity from Mykola Skoryk for his suspected role in organizing anti-Maidan beatings in Odesa in February 2014 as the regional administration head.

The government is targeting the Opposition Bloc for several reasons, which include conducting a public relations campaign of fighting corruption. The government also needs to shift attention from its own economic failures and lack of reforms. There’s also the need to place some pressure on those parties that exceed support for the president’s force, as recent polls indicated.

Ultimately however, we believe the Opposition Bloc is an extremely convenient opposition party for the government because it produces soft Russian-oriented rhetoric without posing any real threat. Indeed many Opposition Bloc figures enjoy close ties to their counterparts in pro-Western parties and the president’s entourage, including Rinat Akhmetov and Dmytro Firtash.