Ukraine Security Service searches Kernel headquarters

The Security Service of Ukraine (SBU) conducted a search of the headquarters of Ukraine’s largest sunflower oil producer Kernel (KER PW) on May 12, Interfax-Ukraine reported the same day. The search started in the morning and SBU officials were blocking employees in their offices as of 2 p.m. The company hasn’t released an official comment.

The search “was conducted on the basis of a court ruling,” said an SBU spokesman cited by Interfax, not specifying what ruling he was referring to. The report also cited a Kernel attorney stating that he wasn’t aware of any court ruling allowing such actions.

Alexander Paraschiy: Thus far, we have no idea of the motives for the search. The SBU has become increasingly active as Kernel is the second large Ukrainian company to be targeted for investigation this week, in addition to state  natural gas producer Ukrgazvydobuvannia. There is not enough info about this case to foresee any consequences for Kernel’s fundamentals. Thus far, the only tangible risk for Kernel shares is a negative reaction by the stock market.