Page 7 - FSUOGM Week 41

FSUOGM COMMENTARY FSUOGM

Former US diplomat
Amos Hochstein.

seat on Naftogaz’s supervisory board. No infor- will imperil Ukraine’s quest to build a strong,
mation is publicly available on Louisiana Natural democratic and free Ukraine.”
Gas’ ownership structure or its assets. All the independent directors on Nafto-
“Every part of this sordid affair represents gaz’s supervisory board resigned in 2017 over
the ills and dangers facing Ukraine as it slides resistance to reforms. The former government
back towards its past,” Hochstein said. “Signing of President Petro Poroshenko unsuccessfully
an agreement with an unworthy and questiona- tried to oust Kobolev last year, who has built up
ble US company while appointing its executive, a reputation of a reform-minded manager with
a man who worked for the very same corrupt good standing internationally. Poroshenko's
Yanukovych and (ex-Energy Minister) Yuriy successor Volodymyr Zelenskiy has promised
Boyko schemes that the EuroMaidan Revolution to fast-track reforms and ensure greater inde-
sought to oust and end.” pendence at state institutions. But Hochstein’s
Naftogaz finally managed to convince the comments, and the resignation of Ukraine’s
Hochstein's departure is reminiscent of the walk-out of all the company's previous independent government to end public service obligations central bank governor Yakiv Smolii in July over
for households in August, under which the what he said was “sustained political pressure,”
directors in 2017, again over a lack of government commitment to reform company to buy gas from its production arm for suggest otherwise.
onward sale to residential consumers. The end
With Hochstein’s departure, the current
of these "corrupt" schemes has given Ukrain- board comprises chairperson Clare Spottis-
ian households a choice of supplier for the first woode (UK), Bruno Lescoeur (France) and
time, Hochstein said. But this was followed by Ludo Van der Heyden (Belgium), as well as
“unfounded accusations” against Naftogaz's state representatives Nataliya Boyko and Yuliya
management, he said. Kovaliv.
Ukraine’s anti-corruption prosecutor’s office Kobolev thanked Hochstein for his involve-
has said it suspects Naftogaz’s top executives of ment in corporate governance reforms launched
stealing UAH730mn ($26.3mn) of gas supplies in 2014 that helped free Naftogaz of “political
in 2016-2017 in a treason case. Naftogaz CEO and other interference,” as well as his role in
Andriy Kobolev insists the company has “noth- securing the company’s victory in an arbitration
ing to hide.” case against Russia’s Gazprom.
“The old tactic of using prosecutors and audi- "I want to assure him that the company will
tors for intimidation and retaliation is back,” continue along the reform path and complete its
Hochstein said. “I can no longer stand by and be transformation successfully," Kobolev contin-
used to endorse this negative trend, and it’s why ued. "Meanwhile, the management will further
I must voluntarily leave the board.” strive for transparent decision-making and will
“Acting to strengthen the independence prevent backsliding towards the old corruption
of state-owned companies, to support dem- schemes."
ocratic institutions, and to empower the Supervisory Board chairperson Clare Spot-
Ukrainian people through transparency, tiswoode added that Naftogaz was “resilient to
are not signs of weakness, they are signs of outside influence.” The board will “continue to
strength,” he concluded. “The sooner the protect the company from political influence
government of Ukraine internalises this fact, and any attempts to roll back anti-corruption
the stronger Ukraine will be. Failing to do so steps in the state-owned energy sector.” ™

Week 41 14•October•2020 www. NEWSBASE .com P7