Ex-Owners of Ukrainian Steelmaker Sue

NEW YORK, NY -- The former owners of Ukrainian steelmaker Kryvorizhstal have sued the Republic of Ukraine, seeking to stop the resale of the steel mill next week.


Viktor Pinchuk (L) and Rinat Akhmetov (R)
The lawsuit, filed in U.S. District Court in Manhattan on Oct. 14, was brought by a U.S.-based investment group, Addox Corp.

It said a significant ownership interest in nine companies that bought the steelmaker in June 2004 was held by businessmen Rinat Akhmetov and Viktor Pinchuk, the son-in-law of former Ukrainian President Leonid Kuchma.

Addox holds 10 percent of the American Depositary Receipts of the Nozhnedneprovsk Pipe Plant, which in turns holds 10 percent of Industrial Metallurgical Union, which Pinchuk and Akhmetov used to buy Kryvorizhstal.

Pinchuk and Akhmetov paid $800 million.

The mill was renationalized this year under the new administration and there are three registered bidders for a new auction that will take place Monday.

In its lawsuit, Addox said the government of Ukraine and the Industrial Group Consortium, which was the losing bidder when the plant was sold last year, colluded to secure a Ukrainian court ruling declaring the sale illegal.

The lawsuit charged that the government sought to seize the plant in retribution for public statements made by Akhmetov during the 2004 elections and because of political positions taken by Akhmetov and Pinchuk.

Source: AP