Ukraine president sacks oligarch after oil company row

Ukraine`s president has dismissed a powerful oligarch from his post as regional governor in a showdown exposing the high-level internal conflicts of a nation already battling pro-Russian separatists.

Kiev: Ukraine`s president has dismissed a powerful oligarch from his post as regional governor in a showdown exposing the high-level internal conflicts of a nation already battling pro-Russian separatists.

President Petro Poroshenko accepted Igor Kolomoisky`s offer to step down as head of the key industrial region of Dnipropetrovsk, his office said Wednesday, after a dispute over control of the main state oil and gas company ended up with armed men storming two office blocks in Kiev.

"The president of Ukraine confirmed Igor Kolomoisky`s request to resign" at a meeting between the two men in Kiev, the presidency said in a statement.

The banking billionaire was appointed to the post after the ouster of Kremlin-backed president Viktor Yanukovych last year and he has proved a staunch bulwark against the pro-Russian rebellion rocking neighbouring eastern regions.

He funded a powerful volunteer militia group that has taken a leading role in fighting against the heavily-armed insurgents, even offering a $20,000 reward for any separatists surrendering to the authorities in the strategic central region bordering the conflict zone.

Kolomoisky`s departure has stoked fears that the region`s delicate peace could be shattered, but Poroshenko insisted that stability was a priority.

"We have to maintain peace, stability and calm. Dnipropetrovsk must remain a bastion of Ukraine in the east to defend the peace and calm of its citizens," he said in the statement.

Although Kolomoisky, 52, officially resigned, experts believe it was Poroshenko`s decision.

Political commentator Taras Beresovets said the president had "shown himself to be a strong player... and reinforced his legitimacy in the eyes of the West".

Poroshenko -- himself a billionaire -- is under pressure from the International Monetary Fund (IMF), which approved a $17.5 billion rescue package for Ukraine`s war-battered economy earlier this month, to tackle the oligarchs and stamp out corruption.The end of Kolomoisky`s tenure came after armed men suspected to be working for him barricaded themselves into the headquarters of the Ukrnafta energy company, before leaving peacefully Tuesday after a tense two-day standoff.

Kolomoisky`s Privat Group owns 43 percent of Ukrnafta.

The show of force followed parliament`s adoption of a law that increases state control over public companies, weakening Kolomoisky`s de-facto grip on the oil producer.

The occupation came just days after armed men briefly occupied the headquarters of Ukrnafta`s pipeline management subsidiary, UkrTransNafta following the sacking by Kiev of chief executive Oleksandr Lazorko, Kolomoisky`s ally.

One of Ukraine`s most controversial oligarchs, Kolomoisky -- who is estimated to be worth $2.4 billion (2.2 billion euros) -- gained popularity after committing to a united Ukraine at the start of the war a year ago, and for calling Russian President Vladimir Putin a "schizophrenic of short stature".

Influential journalist Yuri Butusov said Kolomoisky "will have to prove that he can still be a patriot" without his political post.

Kolomoisky, famous for having a shark aquarium in his office, has often been accused of using threats of violence as he built his empire, which stretches from the banking sector to metallurgy through aviation and media to football club Dnipro Dnipropetrovsk.

Fellow oligarch Viktor Pinchuk has even accused him of arranging gangland murders.

But he is widely credited with helping halt the advance of rebels in the east by establishing the militias that fought alongside government forces to keep Dnipropetrovsk out of rebel hands.

Poroshenko`s decision to allow Kolomoisky to resign has allowed the oligarch to emerge from the dispute looking like a "heavyweight player and a great strategist", reducing the immediate prospect of unrest in his stronghold, MP Sergei Vysotsky said.

However, the prospect of a battle between the government and the oligarch was worrisome, warned journalist Butusov.

"Dnipropetrovsk is a key region for the stability of the whole of southeastern Ukraine. For that reason, it is scary."

Highlighting Kolomoisky`s influence in the fight against separatists, analyst Volodymyr Fessenko told AFP: "If he wants war, there will be war."

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