Two Ukrenergo Supervisory Board Members Quit Over CEO Ouster
(Bloomberg) -- Two independent members of Ukrenergo’s supervisory board announced they were resigning in protest over the “politically motivated” decision to remove the head of Ukraine’s power grid operator, saying it endangered relations with European partners.
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Daniel Dobbeni and Peder Andreasen said that the move to replace Chief Executive Officer Volodymyr Kudrytskyi without proof of mismanagement was made in “violation of the principles of corporate governance.” In particular, the step risked “further cooperation” with the European Network of Transmission System Operators for Electricity, they said in a joint statement Tuesday.
A majority of board members voted Monday to end Kudrytskyi’s tenure early after he presented a report on the protection of high-voltage grid facilities during Russian attacks and “the situation around the company in the public sphere,” Dobbeni, who was the board chairman, and Andreasen said.
“We strongly believe that the decision on the early dismissal of the CEO of Ukrenergo is politically motivated and, based on the results of the presented report, there are no valid grounds for it,” Dobbeni and Andreasen said.
Ukrenergo’s supervisory board has been operating with only six appointed members, although the Economy Ministry in April announced a process to seek a seventh for the Kyiv-based company.
Improving corporate governance in state-run companies is part of Ukraine’s reform agenda that the International Monetary Fund and other partners, including the European Union, are monitoring. Ukraine’s parliament backed a law in February to increase transparency of state enterprises and expand the powers of their supervisory boards.
An IMF team is to start meetings with Ukrainian officials this week to decide whether to disburse the next $1.1 billion of a $15.6 billion loan program. Corporate governance and efforts to fight corruption are major parts of the program, according to IMF Managing Director Kristalina Georgieva.
Both Ukrenergo supervisory board members who resigned said that they had experienced political pressure since their appointment to the panel in 2021, while ousted CEO Kudrytskyi said that he had initiated Monday’s meeting himself to discuss his performance and dismissal in line with best practice.
Corporate governance and transparency are key to securing financial backing from Ukraine’s partners and rebuilding the country’s energy system, Kudrytskyi said on Facebook. Oleksiy Brekht, who is in charge of high-voltage infrastructure operation at Ukrenergo, will be acting CEO until a new one is selected in an open contest, he said.
The supervisory board of Ukrenergo is “falling apart,” which may mean “huge problems” with foreign loans and donors, Yaroslav Zheleznyak, a lawmaker with the Holos party, said on Telegram. “This is going to raise the issue of corporate governance again with all donors.”
--With assistance from Olesia Safronova and Volodymyr Verbianyi.
(Updates with details from third paragraph.)
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