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Ukrainian Prosecutor General Yuriy Lutsenko has asked Prime Minister Volodymyr Groysman not to extend a contract with CEO of Public Joint-Stock Company Ukrzaliznytsia (Ukrainian Railways) Wojciech Balczun for another term, according to the Ukrainian online newspaper Ukrayinska Pravda, referring to Lutsenko's letter dated August 2.
The chief prosecutor points out to the fact that the prosecutor's office and other agencies have been investigating about 90 criminal cases related to misappropriation, embezzlement, and misuse of office by Ukrzaliznytsia management, Ukrayinska Pravda reported.
In particular, the Prosecutor General's Office of Ukraine (PGO) has been investigating embezzlement of over UAH 150 million, or US$5.8 million, in state funds by Ukrzaliznytsia employees in 2015-2017 through concluding fictitious contracts for the purchase of goods at inflated prices.
Lutsenko also notes criminal cases on the abuse of office by the deputy head of Ukrzaliznytsia's locomotive department, who caused damage to the state totaling UAH 12.8 million, or $494,399.
Read alsoUkrzaliznytsia posts $4.7 mln in net profit in H1 – CEO Balczun Moreover, the letter says that prosecutors from Dnepropetrovsk region at the end of 2016 submitted a motion to the court against Ukrzaliznytsia officials who seized over UAH 1.3 million, or $50,212, in state funds.
The chief prosecutor also mentions a few more cases with involvement of Ukrzaliznytsia's management. In particular, he referred to the investigation by the military prosecutor's office into disclosure by the company's employees of classified information.
Furthermore, Ukrzaliznytsia has been losing almost all cases in courts to commercial entities (compensation has amounted to UAH 22 million, or $849,749, since the start of the year).
"I think this situation in the railway sector stems directly from the poor performance of Ukrzaliznytsia's Board," Lutsenko said in the letter.
Read alsoCabinet to decide on fate of Ukrzaliznytsia CEO after hearing performance report"Given this, I consider it inexpedient to extend the contract with Wojciech Balczun," he added.
As UNIAN reported earlier, on June 21, Ukrzaliznytsia Director for Legal Issues Andriy Omelchenko stated that the contract with Balczun was considered prolonged until June 9, 2019, referring to the provisions of Part 1 of Article 39-1 and Part 2 of Article 23 of Ukraine's Labor Code.
Ukraine's Infrastructure Minister Volodymyr Omelyan, in turn, said that the automatic extension of the contract with Ukrzaliznytsia CEO until June 9, 2019, which was announced by the company, was contrary to the law.
Balczun was appointed Ukrzaliznytsia CEO under a Cabinet order dated April 20, 2016, following an open contest.
Omelyan has repeatedly accused Balczun of lack of professionalism and slow reforms in the company since late 2016. At a government meeting on January 25, Omelyan and Prime Minister Volodymyr Groysman held a discussion on the challenging issues related to reforms at Ukrzaliznytsia and its CEO's performance.
Groysman said then that the Cabinet of Ministers decided to subordinate Ukrzaliznytsia directly to the government in order to prevent the company from becoming a hostage to personal relations and ambitions of certain officials. At the same time, Omelyan insisted on reviewing the government's decision to withdraw Ukrzaliznytsia from subordination to the Infrastructure Ministry and transfer it to the Economic Development and Trade Ministry. He also announced his intention to appeal this decision in court.
Groysman, in turn, suggested conducting a "due diligence" audit of Balczun's activity as Ukrzaliznytsia CEO, following which a final decision on the company's head will be taken.
According to Omelyan, the term of the contract with Balczun expired on June 5, 2017.