EBRD says delay in reforming Naftogaz, resignation of its board will shake confidence in Ukraine

The delay in reforming NJSC Naftogaz Ukrainy and the resignation of independent members of its supervisory board will shake international confidence in the intention of Ukrainian authorities to reform the key state-owned enterprises, and will also complicate the possibility of further existing financial support.

This is stated in a letter of President of the European Bank for Reconstruction and Development (EBRD) Suma Chakrabarti to President of Ukraine Petro Poroshenko and Prime Minister Volodymyr Groysman.

He said that after a series of unpleasant events, the independent members of the Naftogaz supervisory board are going to resign. If this happens, it will not only be a crushing blow to Naftogaz at the time when the reforms have begun taking root but also shake international confidence in the intentions of the government to reform and restructure Naftogaz and other key state-owned enterprises, the document states.

Chakrabarti in his letter expressed concern that the initiated reform of the gas market and the Naftogaz corporate governance, according to the action plan signed between the government of Ukraine and the EBRD, could fail if the Ukrainian authorities do not take necessary measures in the coming days.

He drew attention to the fact that the draft state property policy for Naftogaz, in particular, still contains provisions that contradict the spirit of the corporate governance reform, which could hamper the implementation of intentions of independence and protection of the company from unnecessary political interference.

This should be corrected before the approval of the state property policy. Naftogaz should also become the face of private law, as it was originally agreed. It is needed to do everything necessary to enact the new Naftogaz charter and supporting legislation by the end of this month, the banker said.

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