The decision to dismiss Andriy Kobolyev, Chief Executive Officer of NJSC Naftogaz of Ukraine, adopted by the Cabinet, is a legal manipulation, the company said in a statement on Wednesday, April 28.

Along with the dismissal of the Supervisory Board for two days to sack Kobolyev "is a violation of the basic principles of corporate governance of state-owned enterprises," the company's press service says.

Any decisions on the CEO's appointment or dismissal are reserved to the supervisory board and cannot be delegated, the statement adds.

The way in which decisions were made on Wednesday regarding Naftogaz's governing bodies testifies to "a reversion to the practice of manual control of state-owned enterprises."

Commenting on own financial performance, the company said that, despite crisis and the increase in counterparties' debts due to loopholes created by state regulation, the company provided UAH 141 billion of revenues to the state budget in 2020, which accounts for 13% of the state revenues last year.

In addition, the management has ensured liquidity in the company's accounts in the amount of UAH 57 billion at the moment. Thus, Naftogaz is the only state-owned company that still has a strong liquidity reserve. Uncontrolled access to these funds and their misuse threaten Ukraine's preparations for the next winter season, the statement notes.

Read alsoCabinet sacks Naftogaz chief KobolyevIn a harsh claim, the company said such actions on the part of the Cabinet of "are a signal to all state-owned enterprises: working in the interests of the budget and the people of Ukraine, and not in the interests of individual political forces, will be punished."

"In addition, it is a clear signal to investors in Ukrainian issuer securities: the working conditions of state-owned enterprises in Ukraine are unpredictable and may change depending on political expediency," the company concluded.

Background

At its meeting on Wednesday, April 28, the Cabinet decided to dismiss Naftogaz CEO Andriy Kobolyev and appoint Yuriy Vitrenko, the current acting energy minister, to replace him.

Kobolyev said he learned of his own dismissal from the news, adding he had not filed a resignation letter.