Page 16 - bneMagazine March 2023 oil discount

16 I Companies & Markets bne March 2023
Patton said that GNT also tried to push through a report in the October board meeting, which was created by a third party Argentem had paid for, but there was no information to back it up. At that point, Patton said Argentem knew it was not going to get any information.
“We know they were trading in 2022 when they were telling creditors they weren’t,” Patton said. “They sold sunflower seeds at a $41mn loss to a company called Sunolta, and soon after we can see that Sunolta begins trading with GNT in sunflower oil.”
“In terms of asset dissipation, after enforcement proceedings began in December, we detected they were dissipating assets. For example, the ownership of silos inside Ukraine were transferred to an entity in Switzerland, controlled by GNT Group’s CFO, Dusan Denic,” he added.
Reputational risks
Argentem will continue with the enforcement process and Patton says the firm will take over and operate the terminal
in a “transparent and high- governance way”. He stressed that Argentem is “absolutely not impacting” the grain deal, and insisted that ACP has been given little choice but to take action.
“We’re a professional investment firm investing third party funds. We weren't in a position to allow these guys to pilfer the inventory if that is what was happening,” he said.
When it comes to Ukraine’s international reputation, Argentem says it has received support from the government, despite GNT Group’s employees sending a letter to Ukrainian
President Volodymyr Zelenskiy warning of “reputational risks”.
“What damages Ukraine is when owners act with impunity and without regard for all stakeholders. What doesn’t damage Ukraine is enforcing in those situations,” he stated. “I think
it will be damaging to Ukraine if those things prevail and we don’t prevail,” he added.
According to GNT, state authorities want to mediate the conflict. The company says they are willing to participate, although have fired out claims that ACP and Innovatus have not shown the same level of willingness.
Patton believes Argentem will succeed in the case and stated that the company will continue to invest in Ukraine. If the government is in their favour, he foresees other investors also continuing to invest in the war-torn country, which is desperately seeking funds to help its $700bn reconstruction process.
Certainly, investors have been eagerly eyeballing Ukraine’s post-war potential, with BlackRock CEO Larry Fink telling
the World Economic Forum in Davos that Ukraine “can be a beacon to the rest of the world about the power of capitalism”.
The European Union is conscious that lack of transparency will hinder the reconstruction process and has made sure that transparency and judicial reforms are part of the requirements Ukraine must meet in order to achieve EU accession. Kyiv seems to be trying to follow this path, eager to prove to the bloc that it's taking these issues seriously, with Zelenskiy cracking down on dubious government figures over the past few weeks.
Business group expects earthquakes to cost Turkey $84bn and wipe $10bn from GDP
Akin Nazli in Belgrade
Turkey’s earthquake disaster looks set to cost the country’s economy $84bn and cause the nation a death toll in excess of 72,000, according to the assessments of a business group, the Turkish Enterprise and Business Confederation (Turkonfed), which represents more than 50,000 companies. Turkonfed made the predictions on the impact of the February
6 earthquakes in a report released on February. By the evening
of February 12, 29,605 earthquake deaths had been recorded in southern Turkey and 3,574 in northern Syria. Experts say the survival rate of people trapped after an earthquake is 74% within 24 hours but just 6% by the fifth day.
As regards the Turkonfed estimates, two warnings: firstly, bne IntelliNews has often maintained that Turkey’s statistical bodies have long been producing macro data sets that are totally inaccurate, and, secondly, there has to be real concern
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that given the scale of the disaster, the dead bodies of many people killed by the quakes will be just swept away with the debris. They will be recorded as “missing.” Unregistered migrants in the region are an even more complicated case.
There are far too many observers, including news services that need to focus harder on what the “G” in “GDP” refers to, who take Turkey’s macro data much too seriously. So much enthusiasm for highly dubious figures that make it on to paper and into headlines, perhaps not enough attention to the real costs, the realities people face, out there.
Turkonfed’s report holds that Turkey’s August 17, 1999 Izmit earthquake cost 18,373 lives and economic damage of $17bn, based on the exchange rates at that time.