Serious discussions are underway about the possible state nationalization of the Kyivstar company.
On the morning of December 12, millions of Ukrainians faced an unpleasant surprise - the services of the largest mobile operator Kyivstar stopped working throughout the country. Even the company’s website “died.” In the current technological world, in such cases we are talking not only about the inability to make calls, surf the Internet from a smartphone or use home Internet services. Along with all this, all the devices that were connected to SIM cards and GSM modems from Kyivstar went down - ATMs, payment terminals, alarms... The part of the business that had no backup options was simply forced to partially stop work. And in Lviv, Ivano-Frankivsk, Dnieper and other cities, communication problems even prevented street lights from being turned off on time. Moreover, in the Sumy region, due to a malfunction of the mobile operator, the warning system temporarily stopped working. Some “telegram” channels reported that such a system also stopped working in the Dnieper and Kyiv region.
Kyivstar on its Facebook page (one of the few official communication channels left by the operator) acknowledged technical problems as early as 8.10, but it was not clear from the message that anything too extraordinary had happened.
But the further we went, the more obvious it became that the situation was extraordinary. This was especially felt by residents of the western regions, where Kyivstar historically prevailed in the number of subscribers. Kyivstar users even faced the problem of switching to the networks of other operators using the national roaming service, which was introduced with the beginning of a large-scale war.
Meanwhile, rumors began to spread that problems with the network were related either to searches at the company, or to a hacker attack. Subsequently, the second version was officially confirmed by Kyivstar: the operator reassured that despite the attack on the network core, it was possible to prevent the leakage of subscribers’ personal data and promised all victims compensation for the nervous day.
The government was forced to respond to the “crash” of Kyivstar. The Ministry of Digital Development testified that the consequences of the attack are so significant that Kyivstar subscribers cannot even see the networks of other operators, and reported that after the current problem is resolved, a discussion is planned with all mobile operators on how to protect themselves from similar situations in the future. Deputy Prime Minister Alexander Kubrakov made it clear in the first half of the day that the restoration of communications should wait at least four to five hours. However, the general director of Kyivstar, Alexander Komarov, subsequently made a pessimistic statement: the timing of the restoration of services is not completely clear, remembering the war with the Russian Federation, which has its own dimension in cyberspace.
“We could not counter the attack on a virtual level, so we disabled Kyivstar physically to limit the enemy’s access to the infrastructure. Therefore, we need to act at the physical level, connecting, conditionally, through patch cords to each element of the network in order to understand the level of destruction of the network at the current time,” Komarov explained. Realizing that their operator had problems for a long time, Kyivstar subscribers began to sweep Vodafone and Lifecell starter packs off the shelves, which is why the load on these operators’ networks increased significantly.
It also later became known that Kyivstar was the most affected, but it is not the only target of today’s hacker attack. Monobank also suffered from online terrorists, as reported by the CEO of the project, Oleg Gorokhovsky. But he assured that the situation is under control.
And again the Russian trace
The attack on the largest mobile operator in Ukraine, which led to panic and paralysis of many processes in the country during the war, could not but raise a number of questions regarding national security. In fact, there have been enough complaints against Kyivstar itself for a long time - primarily due to its control by the structures of the Russian oligarch Mikhail Fridman. Fridman's share of shares in Kyivstar (as well as in the mobile operator Lifecell) was arrested by a Ukrainian court only in October.
In September 2023, the Security Service of Ukraine reported in absentia a suspicion against the sanctioned Russian oligarch Mikhail Fridman under the article “Financing actions committed with the aim of violently changing or overthrowing the constitutional order or seizing state power, changing the boundaries of the territory or state border of Ukraine” (Part 3 of Article 110- 2 of the Criminal Code of Ukraine).
The company systematically assures that Friedman in no way influences the company's activities and does not receive any financial or other benefits from its activities. But waves of information about the possible confiscation of Friedman’s share in favor of the state regularly rise. At least, the other major assets of the oligarch - Alfa Bank and the Oscar mineral water plant (TM Morshynska) have already passed into the hands of the state. The situation with Kyivstar is more complicated: its top management, represented by General Director Alexander Komarov, warned against making sudden movements and emphasized that the lion's share of the company's shares is freely traded on the NASDAQ and Euronext exchanges, and more than a quarter of the company's shareholders are citizens of the United States . It was an attempt to protect Kyivstar from nationalization and a move to protect the asset that explained the sensational entry into the company’s Board of Directors a month ago of former US Secretary of State and former head of the CIA Mike Pompeo.
After the start of large-scale aggression, Russian shareholders diligently clear references to themselves from Kyivstar’s public documentation, because this irritates Ukrainians so much.
According to the Ukrainian Stock Market Infrastructure Development Agency (SMIDA), on July 19, 2022, two members of the Supervisory Board of Kyivstar PJSC were replaced. Instead of Alex Bolis, Gennady Gazin came in (previously he worked at the parent company VEON, which owns Kyivstar. In addition, in 2012-2019 Gazin served as a member of the Investment Committee of the Russian-Kazakhstan Nanotechnology Fund (Russia).
Veon is an international telecommunications group of companies headquartered in the Netherlands. He is the sole shareholder of Kyivstar PrJSC. In October, Veon closed the deal to sell Russian VimpelCom (TM Beeline) and formally exited the Russian market.
Veon shareholder structure:
Letterone Investment Holdings SA - 47.9% (Friedman owns less than 50% of Letterone, but is the company's largest shareholder)
The Stichting - 8.3%
Lingotto Investment Management LLP - 7.6%
Shah Capital Management Inc. - 6.7%.
Another member of the supervisory board, Daniil Pasko (ex-adviser to President Petro Poroshenko), was replaced by Loh Bin Abdullah Mohd Khairil Kevin, who held high positions in telecommunications companies in Asian countries.
It is obvious that the exclusion of Alex Bolis from the supervisory board was of a political nature. After all, according to the resource “War and Sanctions,” which is moderated by the National Agency for the Prevention of Corruption, Bolis is on the Board of Directors of the Russian PJSC Vympel-Communications (controlled by VEON). And the head of this company “provides a high revenue part of the budget of the Russian Federation and a significant source of income for the government of the Russian Federation, which supports actions aimed at violent change, the overthrow of the constitutional order, the seizure of state power, changing the boundaries of the territory or state border of Ukraine, encroaching on the territorial integrity and inviolability of Ukraine ", stated in the information of the above-mentioned resource.
On August 5, 2022, there was a change in the leadership of the Supervisory Board of Kyivstar PJSC. Terzioglu Muhterem Kaan resigned as Chairman of the Council. His place was taken by Gennady Gazin, who was elected a member of the supervisory board in mid-July 2022.
At the end of 2022, another member of the Kyivstar Supervisory Board with a potential “Russian trace” lost his position. This is Michael Schultz, who, according to the War and Sanctions resource, is a member of the Board of Directors of the Russian PJSC Vympel Communications.
Schultz's place on the Kyivstar Supervisory Board was given to Karen Marie Linehan, who worked in various European and American companies.
In 2023, rotations in the supervisory board continued. What is noteworthy: on April 28, by the decision of the general meeting of shareholders of Kyivstar PJSC, member of the supervisory board Andrey Kobolev, the former head of Naftogaz, and now accused of abuse of office, was re-elected. Kobolev was supposed to work in this position for three more years.
However, on May 15, his powers were suddenly terminated. Jup Brackenhoff, CFO of the parent company Veon, has been appointed to replace Kobolev.
And already on December 1, 2023, Gennady Gazin lost his powers as chairman of the Kyivstar Supervisory Board. Although he was supposed to lead until April 2026. Terzioglu Muhterem Kaan was returned to the helm of the Council. By the way, there is an interesting fact in the biography of this gentleman: from March 2020 to August 2023, he served as a member and chairman of the Board of Directors of the Public Joint Stock Company Vimpel-Communications (Russia). The same one where Alex Bolis and Michael Schultz are members of the board of directors.
And the “cherry” on the cake: according to the resource “War and Sanctions”, in July 2023, Canada imposed sanctions on the Russian PJSC Vympel-Communications.
In search of high treason
The security service has already opened criminal proceedings regarding the cyber attack on Kyivstar. Moreover, under eight articles at once:
Art. 361 (“unauthorized interference in the operation of information (automated), electronic communication, information and communication systems, electronic communication networks”,
Article 361-1 (creation for the purpose of illegal use, distribution or sale of harmful software or hardware, as well as their distribution or sale),
Art. 110 (“encroachment on the territorial integrity and inviolability of Ukraine”),
Art. 111 (“high treason”),
Art. 113 (“sabotage”),
Art. 437 (“planning, preparation, initiation and conduct of aggressive war”),
Art. 438 (“violation of the laws and customs of war”),
Art. 255 (“creation, management of a criminal community or criminal organization, as well as participation in it”).
As you can see, the “bouquet” is very diverse. Whether any of the local specialists, who were very familiar with the company’s secure IT architecture, helped the hackers should be determined by the investigation.
There are plenty of versions of the current collapse of Kyivstar, including very conspiracy theories. The blow to the Ukrainian telecom giant coincided with the report of the Main Intelligence Directorate of the Ministry of Defense on the destruction of the database of the Russian tax system. As a result of the operation, communications between the central office in Moscow and 2,300 Russian territorial departments were paralyzed. According to the Main Intelligence Directorate, the Russians have been trying to eliminate the consequences of the attack for the fourth day in a row. Therefore, the attempt to destroy the Kyivstar infrastructure looks like a retaliatory strike, although it seems that such a powerful attack was being prepared regardless of the success of the Ukrainian hackers. And its success will encourage the Russians to further attempts to paralyze Ukrainian communication and financial systems.
It cannot be ruled out that here the interests of the Kremlin coincided with the interests of Friedman, who, after the outbreak of the war, denied his support for the Putin regime from abroad, but nevertheless recently returned to Moscow. In this way, the Russian oligarch can make it clear that without his participation, the golden carriage of Kyivstar could turn into a pumpkin at any moment.
But, let’s say, the internal conspiracy version of today’s events is also being discussed. Kyivstar has long been a target for nationalization or confiscation in favor of the state. The media reported that the Ministry of Justice was already ready to file a claim with the High Anti-Corruption Court in order to recover Kyivstar as state revenue, but this difficult decision stalled in the National Security and Defense Council. Deputy Head of the Office of the President Rostislav Shurma, commenting on the future fate of Kyivstar a month ago, directly said that lawyers were carefully studying the legal situation, and assessed the likelihood of sanctions with subsequent confiscation of this company as high.
So today’s story, which has significantly spoiled the mood and plans of millions of Ukrainians, may receive a political continuation...
