Ukraine's PM defends state's takeover of key steel factory and call it legal

Ukraine's Prime Minister Yulia Tymoshenko, on Friday defended the state's takeover of a key steel factory as legal. She also accused the former owner of organizing a show rally to hold onto property he stole from the state when his father-in-law, Leonid Kuchma, was president.

"There is a legal decision of the court regarding the Nikopol Ferroalloy Plant, according to which it must returned to the state," she told reporters.

Kuchma's son-in-law Viktor Pinchuk rallied hundreds of supporters Thursday at the plant and said he will not hand it over unless Ukraine's High Court rules that its 2003 privatization was illegal. The rally continued Friday but with a smaller number of participants.

Last month, Ukraine's High Economic Court upheld a ruling that the privatization was illegal. Pinchuk appealed that decision.

"Despite all of Pinchuk's sniffles and groans, the factory will be returned to the state," Tymoshenko said, accusing Pinchuk of organizing "a show rally."

The standoff, which pitted Pinchuk and hundreds of supporters against riot police, followed a shareholders meeting Tuesday in which new management was named.

Some of the newly elected managers are linked to Privat Bank, a minority shareholder in the factory that reportedly has the backing of Tymoshenko. The new shareholder meeting, however, was heavily criticized as illegal, including by the head of Ukraine's State Property Fund, reports the AP.

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