Page 15 - bneMagazine March 2023 oil discount

bne March 2023 Companies & Markets I 15
Concerns over clarity and transparency
Patton said he noticed problems with the group early on. Difficulties arose when the group allegedly refused to enact on agreements, including transferring the CEO to chairman and appointing a new professional CEO instead.
Moreover, he claims the board of directors wasn’t given enough information and was often asked simply to validate decisions rather than making them, leading Argentem to hire third-party consultants on several occasions to provide information to enable better decision making.
Although operations seemed to run smoothly during the first half of the second year, there were soon concerns over clarity and transparency.
“As we approached maturity, it became less and less clear, and after the war started there was no transparency,” Patton said.
Argentem and GNT discussed an extension, but the Ukrainian company allegedly refused to follow the credit fund's guidelines and disregarded the implementation of a business plan and an audit. According to Patton, GNT felt they didn’t need to follow any of the typical checks due to the war.
GNT argues on its website that it has been transparent all along and was “audited by international firms regularly”, with Ziff-Ivin Associates Ltd conducting quarterly reports since 2020 on the demand of Argentem. Over the summer, the board of directors, made up of Argentem’s appointees, invited Ziff-Ivin Associates to conduct an annual audit, which GNT claims was not necessary on top of the quarterly audits.
“They apparently cleaned out thousands of tonnes of grain
when there was a military lockdown of the port. There's a lot of pieces that don't quite fit together”
“All [ACP’s] statements for the media are vague phrases about our lack of transparency. The creditors do not offer sound arguments. Their aggressive modus operandi took us by surprise because it was absolutely unnecessary,” Hroza told Censor.net.
However, Ziff-Ivin emailed bne IntelliNews after this article was first published to say that they only provided financial analyses to the creditors. It added that: "GNT’s management have not provided audited statements for 2021 or later periods, it refused timely access to creditors- appointed grain inspectors and never provided documentary evidence showing what happened to the $130 million of lost inventory.”
GNT has said that the creditors' steps to enforce their
rights took them by surprise. “GNT Group did not expect
ACP to take hostile steps to enforce the debt collection,
for instance, by suing and blocking operations of the Ukrainian companies, such as Olimpex Coupe International LCC, Metalsukraine Corp Ltd LCC, Inzernoexpert Grain Transhipment Facility LCC,” the group wrote on their website, referring to companies owned by the GNT Group.
Hroza has claimed that ACP only enforced the debt after the terminal became a valuable asset. In the first six months of the grain corridor, the terminal oversaw the transhipment of 1.5mn tonnes of grain, which Hroza claims may have attracted Argentem’s interest.
“Is there another explanation for this haste and the creditor’s refusal to accept our proposal of deferral and reserved lending to give us an opportunity to recover from the war? Most probably, this is because they found a buyer for our assets,” he said to Censor.net. However, he did not provide any evidence to back up this speculation.
For his part, Patton believes that Argentem’s flexibility and multiple extensions during the pandemic led to a perception by the owners that ACP was weak. “They perceived us as people they can do whatever they want with,” he said. “So when the war came, their view was, let's do what we want with the inventory.”
Patton claims that none of GNT’s explanations add up and that the company has provided three or four different stories. In one case, right after a board meeting, GNT told Argentem that grain had to be cleared out of the facilities due to supposed shrapnel damage; however, it provided no crucial evidence aside from “a picture with several small holes”.
“They apparently cleaned out thousands of tonnes of grain when there was a military lockdown of the port. There's a lot of pieces that don't quite fit together,” he said.
Patton described how alarm bells started ringing in August and got louder when no information or official documentation confirming the stories reached Argentem.
He is also not certain that grain levels were at the pre-war quantity when GNT started clearing the silos, or if some of the grain wasn’t already missing by then.
But GNT argues that French inspection and certification company Bureau Veritas inspected the grain and documented its spoilage once the group was allowed to access the terminal in early May 2022.
“It was dangerous to keep such products at the terminal. Once the grain corridor started operating, that grain was replaced with new batches. Since then, the amount of grain has been sufficient to settle the debt,” Naumenko told Censor.Net.
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