Court suspends NACP order to dismiss Vitrenko from Naftogaz

Kyiv District Administrative Court suspended on June
18 an order of the National Agency on Corruption Prevention (NACP) demanding that
the Cabinet of Ministers dismiss Yuriy Vitrenko from the position of CEO
of Naftogaz (NAFTO). The suspension will be valid until the court hears the
appeal by the Cabinet of the NACP order. According to a press release from NACP
on the same day, the court’s ruling “proves once again the urgent need to
complete the judiciary reform.”  Recall, the scandalous court headed by
the odious Pavlo Vovk should be liquidated based on April’s initiative by president Zelensky,
though the parliament is yet to support the initiative. The NACP highlighted
that the court’s ruling to suspend its decision has been adopted
unprecedentedly fast, or “in less than two days,” while courts have over 3,000
corruption cases which remain untouched. It also stated that the court
effectively satisfied the Cabinet’s demand without hearing the case, which is a
violation.

Commenting on the NACP ruling on June 18, PM Denys
Shmyhal called it illegal and not logical. Namely, he said that the NACP
demanded that the PM cancel certain items of a Cabinet resolution which is
impossible as the resolution was adopted by Cabinet (the NACP claims it
demanded this from the Cabinet, not PM). “The government did and will act
exclusively within the limits set by the laws … and expects the same attitude
from other parties,” Shmyhal wrote.

Recall, after the June 15 ruling of the NACP (which is
indeed impossible to implement by the Cabinet alone), the head of Naftogaz
supervisory board initiated a board meeting to consider
recommending the Cabinet to dismiss Vitrenko from the position of CEO. If the
board is able to prepare such a recommendation, there should not be any
impediments for the Cabinet to implement the NACP’s order to dismiss Vitrenko.
Thus far, there is no information whether such a board meeting took place.

Alexander Paraschiy: The
development illustrates a strong political will to retain Vitrenko as Naftogaz
CEO. That allows us to expect Naftogaz supervisory board meeting to consider
Vitrenko’s dismissal will not take place due to sabotage by the three board
members appointed by the government. This will only intensify the conflict
between the independent members of the Naftogaz supervisory board (which seems
to be supported by western governments) and the Ukrainian government (including
the Cabinet, its appointees to the Naftogaz board, Vitrenko and the scandalous
court). That could end up causing reputational damage to Vitrenko and Shmyhal
which in the eyes of western governments aligned themselves with the scandalous
court.

The situation once again shows that scandals and
tensions between Vitrenko and some members of Naftogaz supervisory board are
unavoidable, which promise nothing good for the company. The risk of tensions
would definitely ease if either the independent supervisory board members or
Vitrenko retire. Ironically, in the short-term, any such departure would only
increase uncertainty about Naftogaz future.