Wednesday, December 03, 2014

Ukraine Politics

From blogger Alexei in Moscow:
In this post, after some whining about a potential conflict of interest at the new Ukrainian cabinet, I suggest that the new finance and economy ministers were chosen with a view to attracting foreign capital above all other priorities.

President Poroshenko has granted Ukrainian citizenship to Aivaras Abromavičius, tapped to become the next minister for economic development and trade. A Lithuanian, Abromavičius is a partner with the Swedish fund management firm East Capital and has been overseeing its Ukrainian portfolio since 2008.

East Capital has been a major player in emerging Eastern European markets since its inception in 1997 and has actively invested in Russian stocks. Although the Russian equity market has collapsed since the start of Russia’s assault on Ukraine, its capitalization is still much higher than Ukraine’s. I would be surprised if East Capital were not invested in Russian stocks at the moment.

This means that unless Abromavičius severs all ties with East Capital, his relationship with the fund could lead to a double conflict of interest.

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