Independent forensic audit confirmed commercial gas buyers had equal treatment in dealings with Naftogaz

KPMG Advisory GmbH has completed an independent forensic audit investigating into gas sales by Naftogaz to ERU Trading in Q4 2018 over an alleged conflict of interest in actions of head of the group’s integrated gas business Andrew Favorov

KPMG Advisory GmbH has completed an independent forensic audit investigating into gas sales by Naftogaz to ERU Trading in Q4 2018 over an alleged conflict of interest in actions of head of the group’s integrated gas business Andrew Favorov.

The investigation was initiated by the company management and supported by the supervisory board in February 2019 following an application by another Naftogaz executive to the company’s compliance service.

The independent auditor concluded that ERU Trading had not received any preferences in transactions with Naftogaz group companies. The investigation also concluded that Favorov did not set the price or delivery volumes for any company involved in transactions during the period in question. KPMG has identified that Naftogaz’s policies and procedures in relation to conflicts of interest were followed in relation to this issue.

The audit showed, however, that internal control standards and best industry practices to manage conflict of interest, including relevant policies and trading transaction control, still need to be implemented in the trading subsidiary in question. The supervisory board urged Naftogaz management to implement the independent auditor’s recommendations throughout the group as soon as possible and report on progress.

The summary statement on the forensic audit conclusions can be found under this link.

 

 

Communications department
NJSC Naftogaz of Ukraine

 

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