On Sept. 5, the Antimonopoly Committee of Ukraine (AMCU) ordered agrochemical giant Ostchem Group to sell off one of its nitrogen fertilizer plants.
Ostchem must divest one of three plants designated by the AMCU. The group has a total of five fertilizer plants in Ukraine.
The committee also imposed the highest possible fine of Hr 107 million ($4.25 million) on NF Trading AG, which sold Ostchem’s fertilizers in 2014 – 2017.
All these companies belong to fugitive billionaire oligarch Dmytro Firtash, who is based in Vienna. Austrian authorities detained Firtash five years ago and are one step away from extraditing him to the U.S. – the FBI accused him of paying an $18 million bribe to officials in India for a titanium mining permit.
According to AMCU head Yuriy Terentyev, the committee proved that Firtash’s group abused its monopoly to jack up fertilizer prices during the 2014 – 2017 period.
Read more about Ostchem’s monopoly here.
In addition, Firtash’s plants stopped fertilizer production for dubious reasons during the peak of the planting season from March to June 2017, leading to a fertilizer shortage among Ukrainian farmers.
The committee told the Kyiv Post that Ostchem will have to sell off one of the three designated plants to a reliable investor within the next nine months. The buyer must not have any connection with Firtash.
AMCU also ordered the group to provide monthly reports on the divestment process until it is concluded.
The sale would improve Ukraine’s fertilizer market conditions by introducing a new player.
This is the first time that a market monopolist was ordered to be divided since 1995, according to investigative journalists from Nashi Groshi.
According to AMCU, the decision to force Ostchem to sell one of its plants is the only way to remedy the situation in the market. Heaping large fines on Firtash’s group can only harm the industry.
Firtash’s group strongly criticized the committee’s decision.
“This decision is biased, adopted on the basis of dubious arguments with flagrant violation of the law,” Firtash’s Group DF stated on its website. Ostchem is one of Group DF’s key assets.
According to the statement, Group DF will appeal the AMCU’s decision in court.
