• Natural Gas News

    Naftogaz CEO denies his appointment was illegal


The former acting energy minister says he was not involved in, or able to influence, the decision to appoint him.

by: William Powell

Posted in:

Natural Gas & LNG News, Europe, Premium, Corporate, Corporate governance, News By Country, Ukraine

Naftogaz CEO denies his appointment was illegal

Naftogaz Ukrainy CEO Yuri Vitrenko, previously the acting energy minister, has rejected the claim by the National Agency on Corruption Prevention that his appointment was illegal. The agency said it broke article 26 of the constitution which deals with corruption.

Vitrenko took over as CEO the day after the surprise sacking of Andriy Kobolev late April, a move that shocked the supervisory board into resigning albeit temporarily en bloc. Since then, several senior European executives have left without explanation.

In a June 15 statement Vitrenko said the agency’s conclusion is a textbook example of “selective justice” and bias and it would be overturned in a court.

“The limitations provided in the law can be applied exclusively to an official having relevant authority to decide or participate in making decisions regarding a relevant entity. I did not have such authority in respect of Naftogaz,” commented Vitrenko. “Moreover, the energy ministry was not the company’s governing body. It was the cabinet of ministers. As an acting minister, I was not part of the cabinet of ministers. I did not therefore vote when the government made decisions. And I was neither the head nor a member of the regulator.”

He said the purpose of the limitation was to prevent officials from giving preferences to entities regulated by private law in exchange for future employment or some other unlawful benefits from those entities. His own appointment on the other hand was approved by the government, a collegial body.

“The decision on my appointment was made by the cabinet, so it is absurd to say that I had been pursuing the interests of the entity of private law which later employed me as a 'reward',” Vitrenko noted.

The actions of the NACP could be deemed a textbook example of “selective justice” contradicting both the law and common legal practices, as the agency did not see any risks or violations when relevant ministerial employees were appointed to executive and supervisory boards of state-owned energy and infrastructure companies in 2017-2020.

In his further defence, Vitrenko cited expert opinion from the Koretsky Institute of state and law, which found that the contract with Yuriy Vitrenko as Naftogaz CEO was not subject to anti-corruption limitations as defined in article 26.

“I always rely on the rule of law and I believe that we will be able find out whose legal position is stronger in court,” Vitrenko concluded.

The agency is not alone in its interpretation of the law however: lawyer Alan Riley says that the article prohibits the immediate transfer of an employee from a regulator to the executive control of an entity he or she once regulated. He said the events in Ukraine had set Kiev's cause back by seven years, when it lost Crimea to Russia.

Whatever the findings of a law suit, corruption in Ukraine remains a problem for the country which wants Nato membership. The organisation's head, Jens Stoltenberg, said after the alliance's summit June 14 in Brussels that Ukraine needed to do more to fight corruption before membership could be addressed.