Ukraine's President Petro Poroshenko fired powerful tycoon Ihor Kolomoisky as a regional governor Wednesday in a move that could affect the country's internal balance of power and Kiev's fight against Moscow-backed separatists.
The 52-year-old Kolomoisky has been at the center of a political storm since armed men, apparently loyal to him, briefly entered the offices of the state-owned oil monopoly UkrTransNafta in the capital, Kiev, Thursday night after its director, his ally, was summarily replaced.
As the governor of the eastern industrial region Dnipropetrovsk region, Kolomoisky, a banking, energy and media tycoon with a fortune that Forbes put at $1.8 billion last year, has been a valuable ally to the Kiev government in arming and financing militia groups and volunteer battalions there to hold off pro-Russian separatists.
Commentators suggested dismissing Kolomoisky may have been a tough decision for Poroshenko, who had been under pressure from radical deputies to curb what they said was a dangerous power play in Kiev, still gripped by political tension as an uneasy cease-fire holds in the east.
Russian officials have increasingly portrayed Poroshenko as weak and suggested he faces a major challenge trying to rein in the oligarchs as well as what Moscow calls the party of war.
A statement on Poroshenko's website said he dismissed the tough-talking mogul during a meeting Tuesday after Kolomoisky offered to step down.
Kolomoisky is — alone among Ukraine's oligarchs — credited with taking firm action against separatism in the east, snuffing out rebel attempts to seize control of Dnipropetrovsk last year. As such, he has been a pivotal figure.
There was no immediate word from Kolomoisky's camp on what his next step will be and whether his sacking will affect his support for volunteer battalions that have fought alongside regular army units in the east. The situation remains volatile, with key cities such as Mariupol under threat.
Some say Poroshenko may have been motivated, if reluctantly, to take a tough line with Kolomoisky to demonstrate to Ukraine's Western creditors such as the International Monetary Fund that he was determined to clean up the chaotic money-losing state energy sector.
In a separate move intended in part to impress Ukraine's creditors, two high-ranking state officials were detained in a glare of publicity at a televised government meeting in Kiev on Wednesday and accused of involvement in high-level corruption.
But by alienating Kolomoisky, a highly influential figure in a sensitive region, Poroshenko has taken a risky step as he seeks to win back the diplomatic initiative in the crisis with Russia over the separatist conflict, commentators said.
Some suggested it could mark the start of an internal power struggle between Poroshenko and Kolomoisky, who has emerged from political upheaval and war in Ukraine as the most dominant of the oligarchs.
In what most commentators took to be an indication of growing alarm over Kolomoisky's funding of volunteer armed battalions, Poroshenko said on Monday he would not allow governors to run their own "pocket armies.”
"Sacking Kolomoisky was the most difficult but the truest decision that Poroshenko has made in staffing policy," said Serhiy Leshchenko, one of the deputies who pressed for the president to take action against Kolomoisky.
And though Kolomoisky was not Poroshenko's principal backer in his campaign for president last May, he is known to have the allegiance of about 15 deputies in Poroshenko's political bloc in parliament, Ukrainian media say.
Significantly, Poroshenko went out of his way to give an assurance that the region would continue to be well defended from encroachment by rebels who have taken control of swaths of territory in the two neighboring regions of Donetsk and Luhansk.
"We must guarantee peace, stability and calm. The Dnipropetrovsk region must remain a bastion of Ukraine in the east to defend peace and calm for civilians," he said, according to a comment on his website, after signing the decree on Kolomoisky's dismissal.
Kolomoisky is one of a handful of oligarchs who emerged in the early years after Ukraine's independence from the Soviet Union in 1991 and secured control over large sections of the economy, including key areas such as energy, and becoming key political players behind the scenes.
But the conflict in the east, in which 6,000 people have been killed since last April, has altered the dynamics and the balance of forces among the superrich, with the Ukrainian media now talking of a war of the oligarchs, commentators say.
Kolomoisky's star has risen, these commentators say, while the influence, for example, of steel magnate Rinat Akhmetov — Ukraine's richest man, whose fortune Forbes put at $6.5 billion and much of whose business in the east has been hit by war — has faded.
The influence of Dmytro Firtash, the owner of Group DF, which has interests in the chemical, gas and banking sectors, has also waned since he was arrested in Vienna a year ago at the FBI's request on charges of bribery.
Kolomoisky is involved in a multibillion-dollar legal battle in the High Court in London that pits him against rival oligarch Viktor Pinchuk and relates to ownership of an iron ore mine that was sold off in 2004.
Poroshenko built a billion-dollar empire in the confectionery business before becoming president last May after street protests ousted Moscow-backed President Viktor Yanukovych, triggering Russia's annexation of Crimea and the rebellions in the east.
Al Jazeera and Reuters