REUTERS
The main goal of Ukroboronprom's reform is to make it competitive.
Secretary of the National Security and Defense Council (NSDC) Oleksandr Danyliuk says that Ukraine's Defense Ministry will become a shareholder in state-run Ukroboronprom Concern after the latter undergoes reform.
"At present, it is the Cabinet of Ministers that is a shareholder. My position is that the Cabinet of Ministers cannot be a shareholder, one of the ministries must be a shareholder. The Defense Ministry is the best option that we have discussed. This option also provides appropriate interaction with the president," Danyliuk told RFE/RL's Ukrainian Service in an interview.
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That option has been endorsed and Ukroboronprom's optimization is pending, he said.
"A new head has been appointed, so now he is forming a new team that is aware of how to streamline processes. The optimization will be very serious. Ukroboronprom will work in the interests of the state. As for an old idea to liquidate it or not – look: there are state-owned enterprises [incorporated into Ukroboronprom] and those that do not work must be eventually liquidated, but those that remain will form the backbone of a new Ukroboronprom," he said.
A state-owned company, "as the case with any business, should work efficiently," Danyliuk said.
According to him, the main goal of the reform is to make the company "reliable" and "competitive" both in the local and foreign markets.
"The best model is to turn it into a holding with a well-built management system: there is a supervisory board, clear-cut procedures – how to appoint top managers, how to assess their performance, [how to handle] audit and procurements. That is, all this should be like in a usual business where clear rules are used. It is this transformation that we now want to launch. We often communicate with the new head of Ukroboronprom, and we discuss who should be a shareholder, how a supervisory board is to be formed. And he is very serious about these changes, he has a full mandate from the president to reform Ukroboronprom," Danyliuk said.
In February, Ukroboronprom became the center of a scandal after journalists of the anti-corruption project Bihus.info published materials, revealing amounts of kickbacks and a scheme used to siphon millions of hryvnias from the defense sector.
Soon after the publication of the probe, several incumbent and former officials of state-owned SpetsTechnoExport, which is part of Ukroboronprom, were detained. They were suspected of embezzling UAH 55.5 million, or US$2.19 million, in the defense industry.
As UNIAN reported earlier, the government on May 22 lent UAH 32 million, or US$1.26 million, to Ukroboronprom for a financial audit.
On August 30, President Volodymyr Zelensky appointed Aivaras Abromavicius as CEO of SE Ukroboronprom Concern. The latter incorporates more than 100 enterprises working in Ukraine's defense industry.