Naftogaz executive board members threatened to resign if the government doesn’t find an agreement with the company’s supervisory board before their resignation takes effect on May 14.
Otto Waterlander, the company’s chief operating officer; Petrus van Driel, the group’s chief financial officer; Yaroslav Teklyuk, the director of legal affairs; and Sergiy Pereloma, first deputy chairman, joined forces with the supervisory board against the Cabinet of Ministers.
The supervisory board resigned in protest after being sidelined in the firing of the company’s former CEO Andriy Kobolyev on April 28 and his fast replacement with Yuriy Vitrenko, who had been serving as acting energy minister.
The six members of the supervisory board will stop working on May 14, a month ahead of their contract expiration June 14, according to Naftogaz. “Without a resolution by that date, it becomes impossible for Executive Board members to continue their duties,” the executive board members’ statement reads.
The move comes after three out of six Naftogaz supervisory board members sent an official letter on May 3 to Prime Minister Denys Shmyhal, defending Kobolyev’s results and criticizing the manner in which Vitrenko was appointed.
The letter also foreshadowed what the executive board would do.
“The Executive Board has made clear to us that it is not necessarily going to remain in Naftogaz if it is led by designated CEO Yuriy Vitrenko, who seems unfamiliar with the ongoing transformation, and which he considers altering,” the letter reads.
To appoint Vitrenko, the Cabinet of Ministers bypassed the supervisory board and dismissed it for two days to be able to fire Kobolyev directly without the consent of the board members.
In the letter, the supervisory board called the sidelining of its members to appoint Vitrenko “a mockery of basic corporate governance practices.”
“We cannot support the Soviet-like methods employed to deprive the Supervisory Board from our competence just for a snap in time in order to replace the CEO (…) during a day when the Supervisory Board had no powers,” the letter continued.
Kobolyev was ousted the day after Naftogaz reported it lost $684 million in 2020, its first unprofitable year since 2015. Naftogaz’s net income in 2020 dropped massively compared to 2019 when the company made $93 million in net profit.
However, the company still managed to pay $5 billion in taxes in 2020, which made it far and away the country’s biggest taxpayer, supplying 17% of state revenue.
Many believe the decision to replace Kobolyev with Vitrenko violated Ukraine’s corporate governance rules.
International donors, including the European Union, the European Bank for Reconstruction and Development, the European Investment Bank, the World Bank and International Finance Corporation issued a joint statement on April 30 expressing their concerns over Kobolyev’s sudden ouster.
They called on the Ukrainian government to “make critical management decisions in state-owned enterprises in full compliance with the principles of recognized corporate governance standards.”
