Supreme Court allows Naftogaz supervisory board to dismiss Vitrenko
Ukraine’s Supreme Court ruled on Feb. 2 to cancel the rulings of lower courts that had suspended the NACP prescription demanding that the head of the Naftogaz (NAFTO) supervisory board dismiss Yuriy Vitrenko from the position of CEO. Recall, in July, the National Agency on Corruption Prevention (NACP) directed letters to Ukraine’s Cabinet and the Naftogaz supervisory board head prescribing them to cancel the contract with the Naftogaz CEO. Vitrenko was appointed to the CEO position on Apr. 28, the same day he left the position of acting energy minister. The NACP found a potential conflict of interest in this appointment, referring to Ukraine legislation. The legislation does not allow a person to occupy top positions in a company which this person could have controlled or overseen at a government position within the last year.
Later in June, Vitrenko appealed against the NACP prescriptions directed to the head of the Naftogaz supervisory board. On Vitrenko’s claim, first-tier and appellate courts ruled to suspend the NACP’s letter, while such ruling was effectively cancelled by the Supreme Court on Feb. 2.
In a parallel lawsuit in June, PM Denys Shmyhal appealed against the NACP prescription directed to the Cabinet. In this trial, a first-tier court ruled to suspend the NACP’s letter, but an appellate court overturned that ruling. Shmyhal appealed against the negative ruling to the Supreme Court, but the case has been stuck there.
Alexander Paraschiy: The Supreme Court’s ruling implies that the NACP’s letter to the head of the Naftogaz board prescribing to dismiss Vitrenko is valid. This, however, does not mean that Vitrenko will be dismissed any time soon: the Naftogaz board was dismissed in October meaning there is nobody to implement the NACP’s prescription. As there is no clarity about the timing of a possible Supreme Court ruling on the NACP letter to the Cabinet, Vitrenko has a high chance of retaining his position as CEO until April 28, when the one-year period mentioned in the NACP letters expires. From that date, he won’t have any legal limits against his occupying the CEO position in Naftogaz. In the end, these legal issues do not undermine the fundamentals of Naftogaz, even though they bring nothing positive to the company’s image.