Editor’s Note: This is issue 80 of Ukrainian State-Owned Enterprises Weekly, covering events from March 25-31, 2023. The Kyiv Independent is reposting it with permission.
Ukrainian SOE Weekly is an independent weekly digest based on a compilation of the most important news related to state-owned enterprises (SOEs) and state-owned banks in Ukraine. This publication was produced with the financial support of the European Union within the project “Supporting Ukraine in rebuilding and recovery” implemented by the KSE Institute. The contents of this publication are the sole responsibility of the editorial team of the Ukrainian SOE Weekly and do not necessarily reflect the views of the European Union.
Corporate governance of SOEs
Pre-trial restraint imposed on two defendants charged with being involved in stealing Hr 500 million from UMCC and Odesa Portside Plant; still no public comments from Sennychenko. On March 24, the High Anti-Corruption Court (HACC) ordered the detention of a former adviser to the ex-head of the State Property Fund of Ukraine (SPFU) Dmytro Sennychenko.
Sennychenko is suspected of stealing Hr 500 million ($13.7 million) from Odesa Portside Plant (OPZ) and United Mining and Chemical Company (UMCC), the Specialized Anti-Corruption Prosecutor’s Office (SAPO) reported.
SAPO did not name the suspect, but according to media reports, it is Yuriy Lypko. The court set bail at Hr 5.4 million ($148,000).
If the bail is paid, Lypko would have the following obligations until May 20:
- appear at every request of the detective, prosecutor, or court;
- notify the detective, prosecutor, and court of any changes in his place of residence and place of work;
- refrain from communicating with witnesses and other suspects in the criminal proceedings;
- surrender his travel passports and other documents giving the right to leave or enter Ukraine.
The ruling may be challenged in the HACC’s Appeals Chamber within five days.
On the same day, the HACC ordered the detention of another defendant in the case, one of the former acting СEOs of OPZ, Mykola Synytsia. Bail was set at Hr 5.9 million ($161,000).
According to the SAPO, the prosecutor disagrees with the court’s ruling on Synytsya and plans to file an appeal.
Meanwhile, based on conversations with its sources, Forbes Ukraine has identified six of the nine NABU suspects in the case:
- Dmytro Sennychenko, head of the SPFU in 2019-2021;
- Andrii Hmyrin, a person close to the head of the SPFU (on detectives’ tapes, he appears as the leader of the criminal organization). According to Ekonomichna Pravda (EP), Hmyrin is a key person in Agrogaztrading LLC, a company that supplied gas to OPZ. According to EP’s 2017 investigation, Agrogaztrading was allegedly connected to former SPFU head Igor Bilous and former head of the presidential administration, Boris Lozhkin;
- Mykola Synytsia, acting CEO of OPZ in 2020;
- Mykola Parsentyev, acting CEO of OPZ in 2020-2021;
- Oleksandr Horbunenko and Volodymyr Kolot, co-owners of Agrogaztrading.
Based on Slovo i Dilo’s information, Yuriy Lypko is the seventh of nine suspects in the case.
According to Forbes Ukraine’s sources, Hmyryn was an intermediary between the SPFU and Agrogaztrading. He also had contacts with the President’s Office. Hmyrin was introduced to the President’s Office by Deputy Head of the Office Oleg Tatarov, Forbes Ukraine said. According to its sources, in the office, Hmyrin “found a common language” with Serhiy Shefir, the first assistant to the President of Ukraine, Volodymyr Zelensky.
At the same time, there is still no public reaction from Sennychenko. Earlier, EP contacted him for comment on March 23, and he replied that he would “definitely provide a comment after consulting with the legal team.” He said that this would take several days, but no comment has been made since.
In SOE Weekly (Issue 80), we reported that the National Anti-Corruption Bureau (NABU) and SAPO said that they exposed a criminal group run by Sennychenko. See more about this case in Issue 80.
PrivatBank’s new supervisory board elects its chair. According to SMIDA, on March 23, PrivatBank’s supervisory board elected Nils Melngailis as its chair.
In Issue 69, we reported that, on Dec. 27, the Cabinet dismissed almost all independent members of PrivatBank’s supervisory board and replaced them with new ones after a competitive selection.
As we also reported in Issue 69, Melngailis, one of the newly appointed independent members, has many years of experience in management positions in the banking sector. He has also served as an independent board member at several banks and as supervisory board chair at Luminor Bank AS, one of the leading banks in the Baltic region based in Estonia.
The competitive selection for independent supervisory board members for three Ukrainian state-owned banks – PrivatBank, Oschadbank, and Ukreximbank – started simultaneously on Oct. 11, 2022, with deadlines of Nov. 11, 2022.
There have not been any public updates on the selections for Oschadbank or Ukreximbank.
The Cabinet’s decision to approve new members of Ukrposhta’s supervisory board not disclosed yet. The Cabinet of Ministers has not published its decision to approve the supervisory board of Ukrposhta by the time of this writing.
In SOE Weekly (Issue 80), we reported that the Cabinet announced that it approved five independent members and two state representatives to the supervisory board of the state postal service Ukrposhta.
According to the Cabinet’s release, the independent board members are Rinat Abdrasilov, Jakub Karnowski, Gary John Carroll, Olena Malynska, and Ihor Mityukov. The two state representatives are Natalia Bernatska and Kristina Prasolova. See more about new members of Ukrposhta’s supervisory board in Issue 80.
The Cabinet’s resolution approving the corporatization of Ukroboronprom is not public yet. The Cabinet of Ministers has not yet published the resolution that it adopted on March 21 approving the corporatization of Ukroboronprom.
In SOE Weekly (Issue 80), we reported that the Cabinet said last week that it approved the conversion of the State Concern Ukroboronprom into a joint-stock company called Ukrainian Defense Industry.
The state owns 100% of the new company’s shares. The charter of Ukrainian Defense Industry and the regulations governing its supervisory board were also approved. The company’s authorized capital of Hr 237 million ($6.5 million) has been established through the transfer of assets from Ukroboronprom.
Neither the charter nor the board regulations that the Cabinet’s release referred to were publicly available at the time of this writing.
MGU fails to disclose key governance information, including who leads the company. The resignation of Huberte Bettonville, former chair of MGU’s supervisory board, which we reported in SOE Weekly’s Issue 78, should have come into effect.
According to Ukrainian law, such a resignation notice should be filed (at least) two weeks in advance. If Bettonville filed her notice on March 6, as media reports suggest, then her resignation should have become effective on March 20 or later.
According to the Ukrainian-language version of MGU’s website, Bettonville is no longer listed as a member of the supervisory board, and Jan Chadam is listed as the board chair instead. Bettonville is also no longer listed as a board member on the English-language version of the website, but that version does not say who the chair is.
From that, we infer that Bettonville’s powers have been terminated, and chairmanship has been handed over to Chadam.
According to the law, MGU is obliged to publicly disclose a bunch of information as a joint-stock company, securities issuer, and state-owned company.
In particular, according to the National Securities and Stock Market Commission’s (NSSMC) Regulation on Disclosure, MGU must disclose ongoing information, including information on any changes – such as appointments and dismissals – in the supervisory board and executive body. Such information should be disclosed via the company’s website and NSSMC’s information database, such as Stockmarket or SMIDA.
However, MGU did not disclose information about Bettonville’s resignation publicly: This information is absent both on the company’s website and in NSSMC’s information database. MGU’s latest disclosures in SMIDA and the company’s website date back to November 2021.
In addition, MGU has also failed to disclose information about the acting CEO replacement. According to Bettonville’s earlier interview, Oleksandr Lisnichenko was replaced by Denys Fudashkin about a month ago.
Information on the acting CEO is absent even on the Ukrainian version of MGU’s website. Only the acting chief accountant, Svitlana Pysmenna, is mentioned in the management section on MGU’s website. The English version of the website has no management section altogether.
According to SMIDA, the acting CEO is Valeriy Nozdrin, who had been appointed as such when MGU was established in 2017.
Free access to the Unified State Register of Legal Entities is closed during martial law. According to private aggregators, including Opendatabot and YouControl, which source their information from the Unified State Register of Legal Entities, MGU is run by Denys Fudashkin.
Moreover, MGU must also disclose remuneration reports of the supervisory board and the executive body, as required by regulations applicable to joint-stock companies and law applicable to SOEs.
According to the company’s website, MGU published only one remuneration disclosure in 2018 to comply with the joint-stock company legislation, but it has never published one since.
According to the Law on Joint-Stock Companies, supervisory boards are responsible for monitoring timely information disclosure.
Confiscation of the aggressor state’s assets, nationalization, and asset seizure
The HACC confiscates assets of Russian lawmaker Babashov. On March 24, a panel of judges at the High Anti-Corruption Court (HACC) upheld an administrative claim by the Ministry of Justice of Ukraine to confiscate the assets of a Russian lawmaker based on the Law of Ukraine “On Sanctions.”
The ruling may be challenged in the HACC’s Appeals Chamber within five days.
The court’s press release did not name the Russian member of parliament, but according to Inna Bogatykh, the head of the sanctions policy department of the Ministry of Justice, this refers to Leonid Babashov, a member of the State Duma of the Russian Federation from the Yedinaya Rossiya (United Russia) political party.
Babashov supported the Russian laws on ratification of treaties of friendship, co-operation, and mutual assistance between Russia and its proxies in Russian-occupied part of Donetsk and Luhansk oblasts, as well as several laws that Russia is trying to use to legalize the annexation of the occupied territories of Ukraine.
The court ruled that Babashov’s real estate and land plots in the Autonomous Republic of Crimea, corporate rights, and movable property, should be recovered, Bogatykh added.
