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.