Responding to the developments this week, Timothy Ash, a senior emerging markets strategist at Bluebay Asset Management, said the question over Zelensky now is whether he is a ”‘Servant of the People’ or ‘Servant of the Person’.”
“Whether the guy is really a reformer, or just in the pocket of another oligarch, will be determined by how he plays this one out. Lots of warm words on reform hot topics like land reform will count for nothing if Zelensky backs Kolomoisky in reversing the Privatbank nationalization,” he said in an emailed note.
The tide certainly appears to be turning against the state when it comes to Privatbank. Last week, a day after Zelensky met with Kolomoisky, police raided the headquarters of the bank and seized documents as part of a criminal investigation into whether some of its officials had overstepped their authority.
Meanwhile, Valeria Gontareva, who was the governor of Ukraine’s central bank in 2016 and made the decision to nationalize Privatbank, says she is the victim of a campaign of harassment because of the nationalization.
Gontareva, who now lives in London and works as an academic, was injured when she was hit by a car in London in August, and then a car belonging to a family member in Ukraine was torched in September. Earlier this week, her home in Ukraine was burned down in a suspected arson attack. Kolomoisky has denied any involvement in the incidents.
IMF mission
The comments from Kolomoisky and Honcharuk come at an awkward time for Ukraine after media reports by Bloomberg and UNIAN, a Ukraine news agency, a few days ago suggested that the IMF could be about to agree a three-year $5 billion credit line to Ukraine.
The IMF did not respond to questions from CNBC about the new aid program, but reiterated that it had been emphasizing “the importance of creating an effective anti-corruption framework, that’s been a critical element of our engagement with Ukraine for the last few years.”
Any move to reverse a decision on Privatbank could jeopardize that aid, strategists like Timothy Ash warn. He believes that “any hint at backtracking around the nationalization of Privatbank is a deal breaker for the IMF — and quite rightly.”
But not everyone believes that Zelensky will be a push over.
“We had previously written that we were skeptical of the narrative according to which the oligarch ‘controls’ Zelensky from behind the scenes … we continue to be of the view that such theories are likely overblown,” Andrew Bishop, a partner and global head of policy research at Signum Global Advisors, told CNBC in an email Thursday.
“First, we believe Zelensky has a genuine desire to reform his country. Second, presidents — even the most ‘newcomer’ amongst them — tend to develop a certain confidence of their own once in office,” he said.
- Reuters and the Financial Times contributed reporting to this story