Ukraine factory tussle heats up

Victor Pinchuk is related to the former president of Ukraine

Ukraine's president is pushing forward with the state's takeover of a major steel factory despite fierce opposition from its current owners.

President Viktor Yushchenko is giving prosecutors three days to transfer the Nikopol ferro-alloy plant's shares back into the state's hands.

A group led by Viktor Pinchuk, son-in-law of former president Leonid Kuchma, is fighting the state's ruling.

Mass rallies in support of the group were held at the plant this week.

The plant was sold in 2003 to Mr Pinchuk, but courts have since ruled the sale illegal.

The move follows a pledge by President Viktor Yushchenko to review the cases of dozens of enterprises suspected of being illegally privatized during President Kuchma's 10-year rule.

Mr Pinchuk says he acquired the plant fairly and that the new authorities are trying to seize it by force.

Bitter feud

The stand-off outside the plant on Thursday, which involved hundreds of supporters being held back by riot police, followed the appointment of new management.

Some of the newly elected directors are linked to Privat Bank, run by wealthy businessmen, which holds shares in the factory and reportedly has the backing of Ukraine's Prime Minister Yulia Tymoshenko.

Despite all of Pinchuk's sniffles and groans, the factory will be returned to the state Yulia Tymoshenko, Ukraine's Prime Minister

She has denied that she was involved in any moves to grab the Nikopol plant from Mr Pinchuk and put it in the hands of Privat Bank.

But President Yushchenko has already criticised his government for allowing itself to fall victim to a feud between competing business groups and failing to resolve the situation by legal means.

"The government unfortunately has not expended sufficient effort to prevent the occurrence of various situations and actions staged up by two clans," the president said.

Prime Minister Tymoshenko replied: "I have only the one aim for society: to feel that the justice for which it struggled is being restored."

"Despite all of Pinchuk's sniffles and groans, the factory will be returned to the state."

Mr Pinchuk, a billionaire tycoon, is listed by Forbes magazine has the second wealthiest person in Ukraine but has seen his empire depleted since President Yushchenko defeated his father-in-law's presidential candidate last year.

Earlier this year, Mr Pinchuk and Ukraine's richest man, Rinat Akhmetov, were stripped of their ownership of the state's biggest steel factory.