Sunday, 2 September 2012

Criminal Corporate Raiding

KHARKIV, Ukraine -- About five hundred people of various ages – from retirees to college students – gathered in Rudnev square in front of the court building in Kharkiv, Ukraine, on a sunny morning in August. That’s where the hearings of Ukraine’s imprisoned former Prime Minister Yulia Tymoshenko’s case took place over the summer, before Ukrainian judges in Kiev rejected the appeal on August 29th. The line of police officers, dressed in blue uniforms, divided the crowd into two parts: the larger group, with patriotic music, megaphones, and banners stating “Freedom for Yulia;” and a smaller team, with Ukrainian national blue and yellow flags. The larger group supported Ukraine’s opposition parties. “Gangsters, out!” they chanted in unison, waving the opposition party’s flags. The second, smaller group – about a hundred people – acted less enthusiastically, remaining closer to the court building, holding their flags up high. It consisted mostly of citizens who worked for state organizations and was ordered by management to come out with flags in support of Ukraine’s ruling party—the Party of Regions. Meetings like the one in Rudnev’s square have become very common over the past months, since Tymoshenko was imprisoned on charges of abuse of office for signing gas contracts with Russia. In the West, as well as among many Ukrainians, she’s widely considered a political prisoner, the victim of a political vendetta between herself and current president, Viktor Yanukovych. She was sentenced to a seven-year term in prison and her lawyers have said they will appeal to Europe’s human rights court. Her court hearings, as well as other developments in Tymoshenko’s case, give the opposition good reason to organize protests. They also attract regular people who seek justice. They come from various regions of Ukraine, not so much out of concern over Tymoshenko’s imprisonment but rather outrage by the current state of events in the country and its effect on their lives. “Gangs: out!” – they chant in their meetings. he message is directed against militia, authorities, officials, and the ruling Party of Regions. The general thought is that the government is incompetent; authorities themselves don’t respect the law and act like a group of gangs. “I came here, because they’ve taken over my business,” said a neatly dressed man in his forties, who preferred to remain anonymous. He participated in the meeting near the court building. “They just came and took away my business that I’ve developed myself. Is there any way to stop this?” “They”, according to many people I’ve spoken with, are some power groups, either militia or people protected by militia and by officials. The issue – so-called raiding, corporate raiding or, often, a simple business take over – seems to be the biggest issue that has been on the rise over the past two years. The term corporate raiding exists in Western business terminology but it’s not the same as raiding in Ukraine or Russia, which is often accompanied by verbal threats, physical violence, and sometimes involves guns. Giving up business under unlawful pressure was quite a common problem in the 1990s, after the collapse of the Soviet Union, and it became less present in the 2000s, before returning, fully blooming, in 2010. In 2011 Martin Raiser, head of the World Bank in Ukraine, warned that raiding has become a major problem in Ukraine, threatening investors and the country’s economy in general. An article in the Kyiv Post covered the problem of raiding in Ukraine and suggests that the government backing could be coming from the need to raise money ahead of the parliamentary elections in October 2012. Whatever the reason, it creates a highly dangerous and criminal atmosphere in the country. “If your business brings you more than a certain amount, you become an attractive target,” said Myroslava Marchenko, a small business entrepreneur from Kharkiv. “There is a real threat to profitable businesses that somebody would come one day, and if they come you have no choice.” People don’t like openly talking about this out of fear of getting in trouble. Raiding in Ukraine could be as simple as this: if the company is worth, let’s say, $300,000 “they” could come and offer to buy the business for $50,000. If the owner says no, he would be pushed out anyway and the company would be taken. In some cases, business owners are able to negotiate the terms when they pay certain amount on a regular basis to remain in charge of their businesses and continue to operate. Those who’ve lost their industrial enterprises and plants sometimes feel forced to take on the criminal leanings of their corporate assailants, attempting to take over bookstores and pharmacies. According to numerous anonymous statements – but still, requiring investigations and remaining unconfirmed – the more powerful criminal corporate raiders are connected to the authorities, and to the newly gained ‘power-people’ from Donetsk, a small, industrial town of miners—the region, where current president, Yanukovych, is from. “Donetsk guys,” or “Donetsk clan,” today is a common term in Ukraine. To fight unfair situations legally is impossible since the legal system is closely connected to people of power — business owners try to adapt to existing conditions, creating ties with the “right” people, getting engaged in the system of “fees” for buying “protection”, and so on, anAmong the protesters in Rudnev Square were people who simply didn’t have any other place to go for help in their attempts to find justice. “Nobody paid me to come here,” said Olena Tytarenko from Balakleya region, implying that she’s with the opposition not because they offer her perks. She said her occupation was working with children. A couple of years ago her family got into a confrontation with a group of other residents in her small town. “They paid the militia to beat my mother,” she said. “My pregnant sister was kidnapped. I want justice and I want the militia to bare responsibility for their actions — but no matter what I do there is no result. I want people to know that they all are one gang, a team, and we can’t go on like this.” To fight unfair situations legally is impossible since the legal system is closely connected to people of power — business owners try to adapt to existing conditions, creating ties with the “right” people, getting engaged in the system of “fees” for buying “protection”, and so on, and so on. Among the protesters in Rudnev Square were people who simply didn’t have any other place to go for help in their attempts to find justice. “Nobody paid me to come here,” said Olena Tytarenko from Balakleya region, implying that she’s with the opposition not because they offer her perks. She said her occupation was working with children. A couple of years ago her family got into a confrontation with a group of other residents in her small town. “They paid the militia to beat my mother,” she said. “My pregnant sister was kidnapped. I want justice and I want the militia to bare responsibility for their actions — but no matter what I do there is no result. I want people to know that they all are one gang, a team, and we can’t go on like this.”d so on.

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