Backstage games of Ukrnafta: who wants to take over the company and why

21 February 08:17

While society is focused on geopolitical challenges, events are taking place in Ukraine itself that could radically change the structure of one of the largest state-owned companies. We are talking about the reorganization of PJSC Ukrnafta, which may have signs of corrupt raiding and will take place at the general meeting today, February 21. This was reported by political expert and lawyer Mykhailo Schneider on his Facebook page, "Komersant Ukrainian" reports

What’s going on?

Today, at the general meeting of Ukrnafta, it is planned to change the type of company from a public to a private joint-stock company. In addition, the management structure will be changed and the charter will be updated, which may lead to a significant restriction of transparency of the company’s activities.

“At the general meeting of Ukrnafta behind closed doors, on the initiative of the supervisory board, including its allegedly independent members, it is planned to decide to change its type from public to PRIVATE, and its name from PJSC to JSC, the company’s management structure, its Charter, where Koretsky himself will be reappointed to a new position. But if earlier it was a PRIVATE company named after Kolomoisky, now it may become a PRIVATE company of Koretsky & Co,” the expert says.

Schneider emphasizes that these changes were initiated by the supervisory board, which includes allegedly independent members.

“The country is falling asleep, and the mafia is waking up,” the expert comments ironically.

Possible motives

One of the versions of why Ukrnafta is being reorganized in a hurry is related to the possible end of the active phase of the war and the lifting of martial law. In this case, the question of returning the shares alienated by the state to their rightful owners will arise.

“One of the possible reasons for such a rapid reorganization is that it will make this process at least significantly more difficult, if not impossible,” Schneider explains.

Another possible motive is the desire to preserve the power and financial privileges of the current management. According to Schneider, the current director of Ukrnafta, Sergiy Koretsky, risks losing his position in 2025, when his contract expires.

“On November 9, 2025, in accordance with clause 6.1, Koretsky’s golden employment contract at Ukrnafta expires, which gives Koretsky the right to count on its extension. However, given the recent events in Ukraine, talk of elections and the very likely loss of existing support from the authorities, Koretsky reasonably does not consider this prospect to be reliable. Over the years, he has tied himself and his interests very closely to the government. Therefore, the reorganization of Ukrnafta, in which, with the existing support, he will be dismissed as Ukrnafta’s director and appointed as Ukrnafta’s chairman of the board for the next 5 years, will be a real gift of fate for Koretsky,” – he believes.

However, the reorganization will allow him not only to retain his leadership position, but also to receive significant financial compensation.

“Koretsky may receive a ‘tiny’ severance payment in the form of 18 months’ salary (which is about UAH 25 million), and he will also be entitled to bonuses and allowances… Therefore, by terminating his contract early, Koretskyi is enriching himself incredibly, proving to society once again that public officials in times of war have neither conscience nor fear of responsibility to society,” Schneider said.

Corruption risks and pressure for transparency

According to the expert, Koretsky is now avoiding signing not only new contracts but also acts under previously concluded agreements. For these tasks, he has Denys Kudin, who is suspected by NABU of participating in a criminal organization for embezzlement at state-owned plants, and has the right to sign contracts up to UAH 1 billion under a power of attorney issued by Koretsky.

Schneider recalled that Koretsky was appointed in November 2022 in violation of the law, which required that independent directors of Ukrnafta’s supervisory board participate in the selection process, and without competition.

At the moment, Koretsky, like many other “managers,” “understands that leaving his current positions will raise many questions from law enforcement agencies about his responsibility.”

“Therefore, given the positive assessment of Ukrnafta’s performance by the authorities, Koretsky is confident that he will be able to be reappointed and retain control over the company: first, he will become an acting CEO, and then the winner of the competition for the position of the CEO, with a contract for the next 5 years. He is in a hurry to do this right now, anticipating the upcoming elections,” the lawyer believes.

According to the expert, changing the type of company will allow managers to avoid declaring their income and limit the possibilities of public control.

“The private status allows to significantly reduce the amount of information to be disclosed and allows for quite wide opportunities to conceal the company’s activities,” he emphasizes.

In addition, there are concerns that the reorganization will create additional costs for the state and complicate the company’s operations.

“But the reorganization of any company, let alone a large one like Ukrnafta, involves significant costs associated with changing the documentation, registration data, company structure, as well as re-issuing licenses and special permits. This is a huge amount of work and it requires significant financial outlays, among other things. But are these costs reasonable in general and especially during martial law in the country? Won’t formal mistakes lead to another loss of production licenses, and who will be responsible for such consequences?” Schneider emphasized.

Will the authorities react?

Despite the magnitude of the changes, the state shareholders – the Ministry of Defense of Ukraine and Naftogaz of Ukraine – have so far refrained from making official comments.