(AP) - Former President Leonid Kuchma's son-in-law staged a massive rally on Sept. 1 at a steel plant that the government claims he no longer owns, pledging not to relinquish control.

Viktor Pinchuk said he will not hand over the Nikopol Ferroalloy Plant unless Ukraine's High Court rules that its 2003 privatization was illegal. The government, citing an August ruling by Ukraine's Economic Court, claims it already has the court order it needs to retake the plant.

The standoff, which pitted Pinchuk and hundreds of supporters against riot police, followed a shareholders meeting on Aug. 30 in which new management was named.

Some of the newly elected managers are linked to Privat Bank, a minority shareholder in the factory that reportedly has the backing of Prime Minister Yulia Tymoshenko. The new shareholder meeting, however, was heavily criticized as illegal, including by the head of Ukraine's State Property Fund. Tymoshenko defended it.

The factory "is still under my full control, and any attempts to seize it will be theft of property - pure and simple," Pinchuk told The Associated Press in a phone interview from the southern city of Nikopol.

Pinchuk's supporters pleaded with police to leave, read out letters of support that they said were flooding in from across the country and handed out flowers to police. Police officials called on their forces to act professionally.

The rally was broadcast live on Pinchuk's three television networks, which repeatedly warned of an impending police storm. Interior Minister Yuriy Lutsenko warned all sides not to trigger any violence.

President Viktor Yushchenko intervened late on Sept. 1 and ordered the Cabinet and the State Property Fund to find a solution to the conflict, complaining that two business groups were fighting over a strategically important enterprise and that Tymoshenko's team had shown its inability "to secure stability and order in Nikopol."

Yushchenko insisted the state now controls the factory, but said a manager must be found who is "independent, effective and professional, not connected to either business interest."

Nikopol is a major producer of ferroalloys and serves at least 15 of the world's largest steel producers. It was a key asset in Pinchuk's Interpipe Corp.

In July, Interpipe lost control of the factory when the appeals division of Ukraine's Economic Court ruled that Nikopol's 2003 privatization was illegal, and shares must be returned to the state. Last month, that ruling was upheld. Pinchuk has appealed to Ukraine's High Court, but a hearing has not yet been set.

"I tell you now I am ready to accept the High Court's decision, whatever it is, but let's do this according to the law," Pinchuk said.

The billionaire tycoon, whom Forbes magazine has listed as the second wealthiest person in Ukraine, has seen his holdings suffer significantly since Yushchenko defeated his father-in-law's hand-picked presidential candidate last year. A court earlier this year stripped Pinchuk and Ukraine's richest man, Rinat Akhmetov, of their ownership of the nation's biggest steel factory, Kryvorizhstal.

Pinchuk's Interpipe bought its initial 25 percent stake in the Nikopol factory in 2003 and won the right of first offer to buy another 25 percent plus one share stake in a later auction that no other bidders were allowed to participate in. Both stakes were sold for a total of 410.5 million hryvnya ($81 million).

Pinchuk's lawyer, Serhiy Vlasenko, urged the government to wait until all legal appeals are exhausted before taking any action. Some Ukrainian media reported that Pinchuk had ordered employees of his other businesses to flood to the factory, but Pinchuk denied the charges.

"They are not here to defend my property. They are here to defend democracy, to defend their rights," he said.

Yushchenko has pledged to review the cases of dozens of enterprises suspected of being privatized under shady circumstances during Kuchma's 10-year tenure.


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