Editor’s note: This is issue number 150 of Ukrainian State Owned Enterprises Weekly. It covers events from September 29 – October 5, 2024. The Kyiv Independent reposts it with permission.
Corporate Governance of SOEs
The Cabinet completes the composition for UDI’s Supervisory Board. Timur Bondaryev was appointed as an independent member of the Ukrainian Defense Industry (UDI) Supervisory Board by the Cabinet of Ministers on October 4. This appointment completes board composition, liga.net explained.
Timur Bondaryev, the founder and managing partner of Arzinger Law Firm as well as senior lecturer in the department of private laws at the Kyiv Mohyla Academy.
In June 2023 we reported that the State Concern Ukroboronprom had been dissolved and replaced with a joint stock company called Ukrainian Defense Industry. See Issue 95 for more detail.
In January 2024 we reported that the Cabinet of Ministers had appointed UDI’s supervisory board. Oleksiy Honcharuk and Serhiy Konovetz are independent members. Tymofiy Mylovanov is a state representative, as are David Lomjaria and Linndy Smith. Lomjaria became the board chair on Jan. 16. See Issue 115 for more detail.
The charter of UDI states that the supervisory board must consist of six people: half the board must be independent members and the other half state representatives.
Please note that we do not have any information about the selection process for the UDI Supervisory Board, and in particular the selection of its members.
NABU concludes its pre-trial investigation in the Sennychenko Case and says that SPFU’s former leader and his accomplices embezzled million. On October. The National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor’s Office of Ukraine (SAPO) announced on April 4 that they had concluded their investigation into the criminal group led by the former director of the State Property Fund of Ukraine in 2019-2021. Although NABU or SAPO don’t name the suspect, Dmytro Sennychenko was the SPFU chief during that time.
NABU and SAPO stated that the group embezzled over Hr 700 millions (roughly 23 million euros based on the average exchange rate for the period covered by the investigation) from state-owned companies, including the Odesa Portside Plant and the United Mining and Chemical Company. They also said the group laundered around Hr 10 billion (around 333million euros) between 2019-2021.
In March 2023 we reported that NABU and SAPO had exposed a criminal gang run by Sennychenko. See our Issue 80 for detail.
Sennychenko led the SPFU between September 2019 and February 2022. He submitted his resignation letter in Nov. 2021, but Verkhovna Rada approved it only on Feb. 17,2022.
Ekonomichna Pravda contacted Sennychenko at the time for a comment. He replied that he “definitely” would provide a response after consultations with his legal team, which he said could take several days. Sennychenko has not made any public comments since March 2023.
As we reported in Issue No. 83, all the suspects involved in this case were placed on a wanted list by April 2023, including Sennychenko.
In November 2023 we reported that NABU and SAPO had filed additional suspicions regarding all members of the criminal organization allegedly led Sennychenko. They are also suspected of legalizing criminal profits of over Hr 10 Billion (around 333 Million Euros in 2019-2021).
According to NABU Sennychenko’s accomplices include:
* a person who is close to the leader of the SPFU, a co-organiser – although the NABU has not named the suspect, the media have reported that it’s Andriy Myrin.
* Yuriy Lippoko, an adviser to the SPFU’s head;
* Two acting CEOs at different times of OPZ – Mykola Parasentyev, and Mykola Sytsia
* Artur Somov, the acting CEO of UMCC;
* Two owners of Agrogaztrading, the company that won an auction to supply natural gas to OPZ – Oleksandr Kolot and Volodymyr Horbunenko;
* Two other accomplices: Pavlo Prysyazhnyuk (an investment banker) and another defendant.
On Dec. 12, 2023 NABU and SAPO also served a suspicion notice to Denys Kudin, the former first deputy chief of the SPFU. (He was also a member of the supervisory board at OPZ. See our Issue 114 for detail.
In February 2023 Ukrnafta CEO Serhiy Koretskiy wrote in a letter that Kudin had been appointed to lead Ukrnafta’s department for government relations, strategy and development. Kudin was recently reassigned as the first deputy minister of economy. See Issue 75 for more detail.
Kudin worked for the WOG petrol station chain in 2013-2018. Kudin is the first deputy minister of economy since November 2021. He was previously the first deputy head at SPFU.
Kudin confirmed the suspicion on the same date, December 12, 2023. He said that he would use legal means to prove his innocence.
On Jan. 17, the High Anti-Corruption Court court set bail for Kudin as Hr 9 Million (around 218,000 Euros at that time). After posting on Facebook that he was not happy with the court’s ruling and would appeal it, he said he would do so.
Since then, we are unaware of any statements made by Kudin about his criminal case.
As we reported on May 2024 (Issue 131), the HACC ordered Sennychenko’s detention. He is wanted internationally.
Banks
PrivatBank sells petrol station and land plots that were previously controlled by Kolomoisky for nearly Hr 700,000,000 ($16,9 million). EP reported that on September 27, PrivatBank held a SETAM auction for the sale 245 petrol station and 33 land parcels located in 21 oblasts.
In 2016, PrivatBank was controlled by the Privat Group, which is associated with the tycoons Ihor Kolomisky and Hennadiy Bouholyubov. The National Bank of Ukraine requested that the bank receive 120 oil depots as collateral and 248 petrol station as collateral.
During August and September 2016, the bank leased them all to companies that were related to its former investors. The lessees subleased the vehicles to other companies in the Privat group.
PrivatBank was nationalized on Dec. 18, 2016 due to a lack of funds and a risk of bankruptcy. PrivatBank received payments from leasing agreements for the first four month after nationalization. However, the borrowers stopped paying.
PrivatBank was forced to begin the process of terminating the agreements and regaining the control over the petrol station in 2019-2020. The court granted PrivatBank the right to seize 245 petrol stations in November 2023.
According to EP Ukraine and Forbes Ukraine, the majority of the former ANP or Avias petrol station controlled by the Privat Group were put up for auction.
The winner offered Hr. 695,9 million ($16.9 millions), which was only 0.3% higher than the starting price. The winner agreed to pay the full amount within 10 banking days.
The name of the winner was not revealed on the SETAM platform. According to EP, the winner is a company called Max Energy Resource LLC founded and owned Ihor Supranenko. Max Energy Resource began importing fuel only after the outbreak of a full-scale conflict, when the EU was the dominant source of fuel supply to Ukraine, EP said.
Suprunenko said that the company imports only petroleum products and does not belong to any oligarchic group. He said Max Energy Resource is owned by several people, but refused to reveal their names.
Suprunenko stated in his interview with EP that the company’s revenue for 2023 is approximately Hr 1,5 billion (37,9 million euros at average exchange rates over that period). He said that the main purpose of the purchase was the development of the network. He said that the main goal of the purchase was to develop the network.
Suprunenko said that the company planned to launch half of the petrol station they acquired in the next year. 55-60 petrol stations would be launched in the first phase (six months), and another 50-60 stations will be launched in the second phase. He clarified that the remaining petrol stations required restoration and that about 50 were either destroyed or in occupied territory.
According to Suprunenko a total Hr 1.2 million ($29 million) is expected to be invested in the project during the first year. This includes the Hr 700 millions ($16.9million) that will be paid for petrol station. Max Energy Resource is still waiting for the Antimonopoly Committee of Ukraine to approve its merger.
Defense
UDI will cooperate with four NATO weapons companies. On October 2, UDI announced that it had signed partnership agreements with companies from the U.S.A., France and Poland.
The partnership covers cooperation in the fields of unmanned aerial vehicles and special chemicals as well as electronic intelligence, electronic warfare, and electronic intelligence. UDI has not revealed the names of these companies, most likely for security reasons.
In Issue 114 we reported that in 2023, Ukrainian defense companies owned by the state began manufacturing new weapons. They also signed contracts for joint production and cooperation with counterparts from NATO member countries. For more information, see Issues 74-111.
Privatization
Land Bank leases state land for Hr35 million ($849,000). The State Property Fund of Ukraine reported the results of 16 online auctions to sublease state agricultural land as part of the Land Bank Project on October 1.
According to the SPFU 94 bidders were in competition for 16 land parcels in Vinnytsia Oblast, with a total of 1,075 ha. The sublease value increased by eight times the initial price. SPFU said that the average sublease was Hr 33,000 ($801) a hectare.
The winning bids were slightly more than Hr 35,000,000 ($849,000) and 10 bidders took home the auctions. The sublease agreement must be signed within 20 working day and the payment of the price plus VAT is due within five working days. SPFU explained that they will then be able to use the land plots over a 14-year period.
By the end 2024, 1,900 more auctions for over 100,000 hectares are planned in 20 oblasts.
As we reported back in Issue 93, the SPFU had plans to centralize property management for the state, including a land bank.
We wrote that on August 11, 2023, the Cabinet transferred 25 SOEs previously managed by the National Academy of Agrarian Science to the SPFU. (see Issue 100).
In June 2024 the Cabinet seized 2,764 agricultural plots totaling more than 104,000 acres from SOEs. The Agrarian Investment Fund, managed by the SPFU, was given control. The SPFU announced that the Land Bank was now ready. The next step was the corporatization of the Agrarian Investment Fund so that it could act as an auction operator (see issue 136).
In August, the SPFU completed corporatization the Agrarian Investment Fund by creating State Land Bank LLC based on its basis (see issue 144).
Sale of state agricultural land for lease (see issue 145).
Ukrainian citizens will be able to legally buy and sell land starting July 1, 2021. The sale and purchase state-owned and collective agricultural land remains banned.
Ukrainian SOE Weekly is a weekly independent digest that compiles the most important news about state-owned enterprises in Ukraine (SOEs) as well as state-owned banks.
The Ukrainian SOE Weekly editorial team is solely responsible for the content of this publication.
Andriy Boysun produces and finances the SOE Weekly. CFC Big Ideas provides and finances communications support. The SOE Weekly has not been influenced or financed by an external party.
Editorial team: Andriy Boysun, Oleksiy Pavlysh, Dmytro Yablonovskyi and Oleksandr Lisenko.
Ukrainian SOE Weekly is a weekly independent digest that compiles the most important news about state-owned enterprises in Ukraine (SOEs). Editorial team: Andriy Boysun, Dmytro Yabonovskyi, Oleksandr lysenko, Oleksii Pavlysh, Mariia Kramar.
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