KSE to check Milovanov over corruption in Energoatom: what is known
17 November 13:56
The Board of Directors of the Kyiv School of Economics (KSE) has decided to conduct an external audit of compliance and possible reputational risks before its annual meeting scheduled for November 22. The reason for this is the resonant events of recent days related to NNEGC Energoatom. This was announced by Tymofiy Mylovanov, President of the KSE, former Minister of Economy and former member of the supervisory boards of Energoatom and Ukroboronprom, "Komersant Ukrainian" reports
Milovanov noted that the launch of such a procedure is a standard practice for the KSE in cases where the situation gains public attention and requires maximum transparency.
On November 14, it became known that Tymofiy Mylovanov was resigning from his position on the Supervisory Board of Ukroboronprom.
on November 11 , he announced his resignation from the Supervisory Board of Energoatom amid a scandal surrounding the state-owned power generating company.
“This is a normal procedure that we activate whenever the situation receives increased attention and requires the most transparent verification of facts. Formally, it covers my actions, including my work in the supervisory boards of state-owned companies. I am confident in my decisions, and the task of this audit is to independently verify and record this,” he wrote.
According to Milovanov, this is exactly what the Supervisory Board of Energoatom should have done immediately after receiving information about possible violations – that is, immediately initiate an external independent audit.
“The Supervisory Board failed” – reasons for resignation
Mr. Milovanov explained that one of the reasons for his resignation was the lack of action on the part of the Supervisory Board of Energoatom.
“It failed to do so, and this is one of the reasons for my resignation. I insisted on the temporary suspension of those involved in the investigations and the creation of an independent ethics and compliance committee with a forensic audit. Instead, we listened for hours to the “no threats” and “not enough data,” he said.
International experts were involved in the investigation
Milovanov emphasized that in order to completely eliminate any ambiguities, KSE engaged a reputable international company specializing in compliance, forensic audits and corporate violations.
“It works with large organizations and is able to independently collect and verify information through its own channels. There are people for whom risks, compliance and forensics are their main job, not a hobby. I learned about the episodes that are currently being investigated by law enforcement agencies from official reports and the media. When I found out, I acted harshly and quickly. Therefore, it is personally beneficial for me to be checked by external people whom I cannot influence. There will also be a separate block of interviews with those who agree to be interviewed by partners, government agencies, and companies. If you want to be interviewed, you can write to me or any of the co-chairs of the KSE Board of Directors,” he explained.
He added that while the audit is still ongoing, he is following the Board’s recommendations and refraining from discussing the details publicly.
“While this audit is ongoing, I am following the Board’s recommendation and not going into details publicly. The logic is simple: to show everything once with facts and documents, and not to tell excerpts in the feed under each post,” Milovanov said.
When will the results be available?
on November 22, the KSE Board of Directors will receive an interim report.
The final report is expected in a few weeks.
Upon completion of the audit, KSE promised to publish its results with documents and conclusions.
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Who were the members of the dissolved Energoatom board
The competitive selection of three independent members of the Supervisory Board was announced in February. In January 2024, Energoatom was registered as a joint-stock company. On February 21, the company received a certificate of registration for the issue of shares worth more than UAH 306 billion.
on June 22, 2024, the competitive selection process was completed and the Supervisory Board of the Energoatom Company was formed
The previous Supervisory Board consisted of both independent international experts and state representatives.
Independent members:
- Timothy John Stone is the Chairman of the UK Nuclear Industry Association and Nuclear Risk Insurers, a global leader in nuclear insurance. He is an independent director of Horizon Nuclear Power and a non-executive director of the European Investment Bank.
- Michael Elliot Kirst is the founder and managing director of EuroAtlantic Partners, with deep global expertise in the energy sector and the nuclear industry in particular. He has held senior positions at Westinghouse Electric Company.
- Jarek Neverovic is a former Minister of Energy of Lithuania and Chief Advisor to the President of Lithuania on Environment and Infrastructure.
Representatives of the state:
- Vitaliy Petruk – Head of the State Agency of Ukraine on Exclusion Zone Management (2015-2019).
- Tymofiy Mylovanov – former Minister of Economic Development, currently President of the Kyiv School of Economics.
What is known about corruption at Energoatom?
on November 10, the NABU announced the exposure of a corruption scheme at Energoatom, which included current and former energy officials. The criminals received undue benefits from the company’s contractors in the amount of 10-15% of the value of contracts, using the so-called “barrier” scheme to control payments and the status of suppliers.
The scheme involved a former deputy head of the State Property Fund, who became an advisor to the Minister of Energy, and a former law enforcement officer, who was the executive director of physical protection at Energoatom. Law enforcement officers found that the actual management of a strategic enterprise with an annual revenue of over UAH 200 billion was carried out by unauthorized persons without formal authority.
In addition, the NABU uncovered the “Legalization” scheme, in which a Kyiv office associated with the family of former Russian MP Andrii Derkach laundered money through a network of non-resident companies. About $100 million passed through this scheme, keeping “black books” and issuing cash outside of Ukraine.
According to MP Yaroslav Zhelezniak, the members of the criminal organization identified so far include:
- former advisor to the Minister of Energy Ihor Myroniuk;
- dmytro Basov, Executive Director for Physical Protection and Security of Energoatom JSC;
- businessman and head of the criminal organization Timur Mindich;
- four people – employees of the back office for money laundering.
At the same time, NABU reported only on searches at Energoatom, without mentioning Mindich or Halushchenko.
For his part, President of Ukraine Volodymyr Zelenskyy emphasized the need for transparency at Energoatom and the inevitability of punishment for corruption schemes in the energy sector.
MP Yaroslav Zheleznyak submitted resolutions to the Verkhovna Rada to dismiss Minister of Justice Herman Halushchenko and Minister of Energy Svitlana Hrynchuk.
