Cabinet offers to prolong contracts of Naftogaz Supervisory Board

The government is ready to sign contracts with the members of the Supervisory Board at NJSC Naftogaz of Ukraine for the same term as that of the company's new CEO, Yuriy Vitrenko.

That's according to Prime Minister Denys Shmyhal who met with the G7 ambassadors in the wake of the latest controversy regarding the dismissal of former Naftogaz CEO Andriy Kobolyev, as international partners called on Ukraine to act in line with the corporate governance standards.

"The Government is consistently committed to pursuing corporate governance reform and other key reforms for Ukraine," Shmyhal told the G7 ambassadors and the EU Delegation to Ukraine on May 14, according to the Cabinet press service.

On Thursday, May 13, representatives of the government and the President’s Office had met with members of Naftogaz Supervisory Board, the report adds.

Read alsoG7 envoys issue statement on Naftogaz row"According to Denys Shmyhal, the state is ready to sign contracts with members of the Supervisory Board for the same term as with the CEO," the press service states.

The prime minister also noted that "members of the Supervisory Board of Naftogaz of Ukraine have received an offer from a shareholder to stay for one year. During this time, we will conduct a transparent open selection of candidates for the new Supervisory Board, and only after that a competition for a new CEO of the company. The Government is ready to take steps to ensure the stability of the company during this transition period."

Apart from that, Denys Shmyhal noted that at a meeting with members of the Supervisory Board, a possibility was discussed of a United States representative joining the Board. He added that the Government would expect a positive decision of the Supervisory Board.

"Together with the Group of Seven countries and international financial partners, we have a chance to start a new page in the implementation of corporate governance reform at the main strategic companies of Ukraine," said Denys Shmyhal.

According to the Prime Minister, one of the first steps to restart corporate governance reform should be to resume the work of the nomination committee.

"It would be good to see a committee that would become not only a tool for selecting quality candidates for supervisory boards but also a platform for discussing problematic issues that we have in many companies," said the Prime Minister.

During the meeting, Denys Shmyhal asked Matti Maasikas, Head of the EU Delegation to Ukraine, to involve representatives of the European Union in the work of the nomination committee.

Reshuffle at Naftogaz

• On April 28, 2021, Ukraine's Cabinet of Ministers suspended the powers of members of the Supervisory Board of NJSC Naftogaz of Ukraine, apparently to allow shareholders to sack Chairman of the Board Andriy Kobolyev, while appointing Yuriy Vitrenko to that position.
• The move followed consideration of the company's annual report for 2020.
• The decision is a legal manipulation, Naftogaz said in a statement on Wednesday, April 28.
• Along with the dismissal of the Supervisory Board for two days to sack Kobolyev, it is "is a violation of the basic principles of corporate governance of state-owned enterprises," the company's press service said.
• Any decisions on the CEO's appointment or dismissal are reserved to the supervisory board and cannot be delegated, the statement adds.
• On May 1, all members of the Supervisory Board at NJSC Naftogaz of Ukraine submitted resignation letters.