Billionaire banking tycoon Igor Kolomoisky was appointed governor of Dnipropetrovsk Oblast, a region in the east of the country that includes Ukraine’s third-largest city, in March last year. He had one job — to prevent the territory from falling into the hands of pro-Moscow rebels.
Although, he was a close ally of President Petro Poroshenko’s new government in Kiev, they had neither the financial nor military clout to allow him to achieve that aim. As such Kolomoisky decided to build his own private army of volunteers equipped with heavy weaponry and paid for all of this from out of his own pocket.
The recruits for these so-called battalions came from Ukraine, Europe and even the odd American with estimates suggesting Kolomoisky could call on over 20,000 troops and reserves. His Dnipro Battalion, also known as Dnipro-1, includes around 2,000 heavily-armed fighters the unit is reported to have cost the banking billionaire $US10 million to set up.
They helped play a key role is halting the advance of the Moscow-backed rebels from their strongholds in the neighbouring Donetsk and Luhansk. However, there have long been doubts over where the troops ultimate loyalties lie — to the government in Ukraine or to their regional paymaster.
The events of the past week, with armed men in masks stormed the headquarters of state-owned oil company UkrTransNafta in the Ukrainian capital Kiev following the sacking of its director Oleksander Lazorko, a key ally of Kolomoisky, has only deepened suspicion.
With the governor’s sacking on Tuesday by Poroshenko, however, this heavily-armed volunteer force could quickly become a major problem for the Ukrainian authorities.
Igor Kolomoisky, a prominent Ukrainian businessman and founder of the country's largest commercial bank Privat Bank, took office in Dnipropetrovsk in March 2014.
Dnipropetrovsk became the front line in the battle between pro-Russian separatists in the east and Ukraine government forces.
He quickly set about recruiting and training volunteer 'self-defence' forces that would become the Dnipro Battalion as well as a number of smaller groups that manned checkpoints.
The battalion was equipped with new SUVs, armoured cars, machine guns and grenade launchers, body armour and new uniforms at a reported cost of $10 million.
It was widely seen as being better equipped than Ukraine government forces and National Guard units.
In total the Dnipro Battalion was reported to number 2,000 combat ready troops with a further 20,000 reserves. In other words, it became a sizable private army.
And they proved an effective force on the battlefield. In August-September 2014 the battalion took part in fighting in the rebel-held Donetsk region, but were routed by pro-Russian forces in the battle for Ilovaysk.
Following the second Minsk ceasefire agreement reached between the two sides in February, the battalion has mostly been patrolling the border between Dnipropetrovsk and the breakaway regions.
That is, until last week when armed men in masks stormed the offices of UkrTransNafta in Kiev following the sacking of its chairman, a key ally of Kolomoisky.
The ensuing stand-off saw Kolomoisky emerge from the building to clash with journalists while his supporters decried the government's actions.
In response, President Petro Poroshenko told troops in the Ukraine capital that no regional governor would be allowed to have a 'pocket army' in a move that looked likely to set him on a direct collision course with his former ally.
And on Tuesday evening, news came through that Poroshenko fired Kolomoisky from his position as governor of Dnipropetrovsk.
The question that everyone is asking now is what will happen to the battalions funded by Kolomoisky? Can the state disband a 'pocket army'?
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