Politics 2022-05-15T04:50:05+03:00
Ukrainian news
U.S. Secretary Of State Blinken Will Ask Ukrainian Authorities Why They Are Refusing To Reform Corporate Gover

U.S. Secretary Of State Blinken Will Ask Ukrainian Authorities Why They Are Refusing To Reform Corporate Governance - Expert

European Union, reforms, United States, Naftogaz of Ukraine, Andrii Kobolev, Denys Maliuska, Antony Blinken, OECD, Volodymyr Tsybulko, corporate governance, Andrii Kobolev dismissal

The change of leadership of NJSC Naftogaz in violation of the obligations assumed by Ukraine as part of the reform of corporate governance of state enterprises will be one of the central topics during the visit of U.S. Secretary of State Antony Blinken to Ukraine, as Western partners perceive such actions of the Ukrainian government as a rejection of the reached agreements, and possibly of further cooperation.

Political expert Volodymyr Tsybulko writes about this in a blog on the Correspondent website.

"An analysis of the reactions of the U.S., the EU and international financial institutions to the change in the leadership of Naftogaz shows that they did not believe one iota that Andrii Kobolev was dismissed for a negative financial result of the company in 2020. And since the Ukrainian government has not yet provided more justified and understandable explanations, skepticism and the negative of Western partners is only increasing," he notes.

Volodymyr Tsybulko recalls that over the past year, both Naftogaz itself and the Ministry of Finance published reports from which it was clear that by 2020 the company would end up with losses, but then the issue of Andrii Kobolev's resignation was not raised.

"How can the Ukrainian government interfere so cynically in the work of a major state-owned enterprise? Financial losses are just an excuse. Naftogaz would have made a profit if the provision of bad debt was excluded," the expert quotes Project Manager of the Organization for Economic Cooperation and Development (OECD) in Ukraine Gabriela Miranda.

Taking this into account, the U.S., the EU, the G7 ambassadors, the World Bank, the European Bank for Reconstruction and Development and other creditors of Ukraine have consistently issued critical statements on the actions of the Ukrainian government and demand that it confirm its commitments to carry out reforms, in particular in the field of corporate governance.

"We hope that the Ukrainian authorities will renew their commitment to continue reforms that will open up investments, which will allow the country to recover and realize its potential," Volodymyr Tsybulko quotes a statement from the EU, WB and EBRD.

Meanwhile, the Ukrainian government is in no hurry to assure its Western partners of its intention to carry out reforms in the future. Moreover, the statements of Ukrainian officials, in particular Minister of Justice Denys Maliuska, can be regarded as a disposition to further neglect the preliminary agreements.

"On April 30, at the Freedom of Speech by Savik Shuster Minister of Justice Denys Maliuska... on the one hand, said that the Ukrainian authorities during the reform of corporate governance of state-owned enterprises left a loophole for themselves not to fulfill obligations and disregard supervisory boards. On the other hand, Maliuska warned investors and creditors: we will use the law that is more beneficial to us at that moment," the expert emphasizes.

He did not explain why, when making a decision on Kobolev, the government was guided by the provisions of the Law "On Management of State Property Objects" and ignored the requirements of the Law "On Joint Stock Companies", which correspond to the agreements on corporate governance reform. The minister also did not explain the grounds for the "removal" of independent members of the supervisory board without a court decision, which is also a violation of the aforementioned law.

"Moreover, it cannot be ruled out that the Ukrainian government is not just "fiddling around", but sincerely believes in the theses that it produces. Then this is evidence of its absolute incompetence, because it turns out that it is simply not able to professionally formulate a legal position and build a clear sequence of actions within the agreed “rules of the game.” And this incompetence of the authorities is becoming an extremely big problem, perhaps even bigger than corruption, which has always been considered the main misfortune of Ukraine," Volodymyr Tsybulko believes.

According to him, from the point of view of Europeans and Americans, Ukraine, under a far-fetched pretext, departs from commitments within the framework of European integration. Moreover, it sends a signal that in the future can ignore them. And for the U.S., an additional negative factor is the fact that all Americans who were independent directors were removed from the supervisory board of Naftogaz.

“The behavior of Ukrainian officials cannot fail to make Western partners feel déjà vu. It is not the first time that Ukraine has ignored long years of negotiations, difficult compromises and mutual concessions, and backed down on its promises. Too many associations with November 2013 arise, when the administration of Viktor Yanukovych and the government of Mykola Azarov at the last moment neglected all agreements with the EU. And everyone remembers very well what this led to," the expert writes.

He draws attention to the fact that the topic of the method of changing the leadership of Naftogaz will be one of the key topics during the visit of U.S. Secretary of State Antony Blinken to Ukraine. Therefore, the statements and actions of the Ukrainian authorities are prompting the idea that it can simply renounce its European integration obligations, but also the Euro-Atlantic vector.

"It is quite a logical conclusion - the country's foreign policy vector will change. And logic dictates that there can be only one direction," Volodymyr Tsybulko sums up.