The decision adopted by the Cabinet of Ministers of Ukraine is a legal manipulation. The dismissal of the Supervisory Board for two days in order to make a decision on the dismissal of the Chief Executive Officer is a violation of the basic principles of corporate governance of state-owned enterprises. According to the Charter of Naftogaz and the Law on Joint Stock Companies, submission of proposals to the general meeting for appointment or dismissal of the chief executive officer along with the relevant decision of the supervisory board is reserved to the supervisory board and cannot be delegated to the general meeting.
The way in which a range of decisions were made today regarding the governing bodies of Naftogaz demonstrates a reversion to the practice of manual control of state-owned enterprises.
Yesterday, the company’s Executive and Supervisory Boards presented the results of Naftogaz’s performance in 2020. Despite the crisis and the increase in counterparties’ debts due to loopholes created by state regulation, the company provided UAH 141 billion of revenues to the state budget in 2020, which accounts for 13% of the state revenues last year.
In addition, the management has ensured liquidity in the company’s accounts in the amount of UAH 57 billion at the moment. Thus, Naftogaz is the only state-owned company that still has a strong liquidity reserve. Uncontrolled access to these funds and their misuse threaten Ukraine’s preparations for next winter.
Such actions of the Cabinet of Ministers are a signal to all state-owned enterprises: working in the interests of the budget and the people of Ukraine, and not in the interests of individual political forces, will be punished. In addition, it is a clear signal to investors in Ukrainian issuer securities: the working conditions of state-owned enterprises in Ukraine are unpredictable and may change depending on political expediency.
Integrated Communications Department
NJSC Naftogaz of Ukraine