Our initial analysis suggests, though, that there is no direct evidence of major wrongdoing. The incident will, however, accelerate the public debate in Ukraine about its outdated corporate governance laws, potential conflicts of interests and political accountability among officials in the highest offices.
On Sunday, a number of media outlets published analysis of leaked documents referred to as the “Panama Papers” that implicate multiple international leaders in using offshore companies to manage their assets. The president of Ukraine, Petro Poroshenko, is among the names listed. Unlike the president of Russia, who is alleged to be connected to a $2 billion dollar network of assets siphoned off the Russian banks, or the prime minister of Iceland, who is suggested to have concealed a major conflict of interest, the transgressions of the president of Ukraine appear to be more of a technical nature.
The papers show that Ukraine’s president created, in his own name, a BVI company, which through its subsidiaries acquired at least one of his major businesses in Ukraine, his chocolate company Roshen. Previously, the company was owned by a Ukrainian mutual fund that also controls all other assets of the president. Clearly, this is not an issue of illegal enrichment while in office.
Nevertheless, the revelation of the president’s transaction has generated substantive public discontent in Ukraine. Over the past several months, the president has been sharply criticized for a poor record of fighting corruption and slow progress of reforms. A recent New York Times editorial accused the president of accepting continuing corruption in exchange for the room to act in the middle of a political crisis triggered earlier this year by a loud resignation of the minister of the economy. Negotiations over the new government are expected to conclude any moment now. Against this background, the leaked documents put the president in an awkward position.
Good Overview plus specific discussion of Prorshenko from Caspian Report: