Poroshenko finally wins a battle: Governor Kolomoysky 'resigns'

Ukrainian President Petro Poroshenko signed a decree relieving Dnepropetrovsk Governor Igor Kolomoysky from his post, the president's website said. The resignation came after a meeting between the two, amid the ongoing standoff around oil giant Ukrnafta.

According to the presidential website, Kolomoysky decided to hand in his resignation, which the president accepted.

"We need to ensure peace, stability and tranquility. Dnepropetrovsk region should remain a bastion of Ukraine in the east," Poroshenko said while commenting on his decision. Meanwhile, Valentin Reznichenko was named acting governor of the eastern region.

The seemingly peaceful resolution came in stark contrast with statements voiced earlier by Kolomoysky's deputy, Gennady Korban, who on Tuesday said that "Kiev is occupied by thieves, and these thieves must go and free the way for honest people" and accused Poroshenko's government of "lying" about decentralization of power in the country and success in the so-called anti-terror operation in the east.

Earlier, media speculated on possible threats posed by Kolomoysky to Kiev after the oligarch was quoted as expressing support for decentralization reforms and talking about the possibility of separatist uprisings in Dnepropetrovsk. "I don't want that...but anything can happen," he told France 24 TV channel.

The conflict involving Kolomoysky, whose net worth is estimated at US$1.3 billion by Forbes, erupted after the Ukrainian parliament, Verkhovna Rada, on Thursday passed a law stipulating that the state could manage any company in which it has a majority share.

Kolomoysky's companies own about 43 percent of Ukrnafta, the country's biggest oil company, and the government controls just over half the shares. According to previous legislation, the state needs 60 percent ownership to exercise active control over a part-private company, which meant that Kolomoysky could treat Ukrnafta as his own property - including withholding dividends from the state and sabotaging quorums at board meetings.

After the government fired Kolomoysky's protégé from Ukrtransnafta - an energy company in which the oligarch also has a stake - Kolomoysky occupied its office with camouflaged men on Friday, accusing the government of being "Russian saboteurs" and "corporate raiders." He also reportedly threatened to "bring 2,000 volunteer fighters to Kiev" before being persuaded to stand down.

On Saturday, Ukrainian media reported that Kolomoysky's Privatbank had blocked Poroshenko's account of $50 million after the president - a major oligarch himself - scolded the ex-governor for "professional misconduct."

Then on Sunday, fighters of the Dnepr-1 battalion funded by Kolomoysky took control of Ukrnafta's central Kiev offices.

The Ukrainian government has given the masked men a day to lay down their weapons. They have so far refused to leave, denying there are any firearms in the building other than "sports guns."

Meanwhile, the National Guard has denied earlier reports that two additional battalions have been dispatched to Dnepropetrovsk to diffuse "rising tension in the region."

The head of the Ukraine's Security Service (SBU), Valentin Nalyvaychenko, demanded that Kolomoysky be prosecuted for seizing Ukrnafta.

"Government officials or official, who appears alongside armed men to make a commercial or other statements, should be held accountable," Nalyvaychenko told Ukraine's Channel 5.