Government risks losing UAH 12 bln from privatization in 2021 due to coordinated resistance of law enforcers, oligarchic groups

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The State Property Fund (SPF) of Ukraine, headed by Dmytro Sennychenko, expresses concern about the actions of law enforcement officials aimed at destabilizing the work of state-owned enterprises, in particular, PJSC United Mining and Chemical Company (UMCC), which manages Vilnohirsk Mining and Metallurgical Plant (Dnipropetrovsk region) and Irshansk Mining and Processing Plant (Zhytomyr region).

According to the SPF press release on Monday, such actions are often illegal, can lead to the curtailment of the privatization process in 2021 and carry the risk of losing UAH 12 billion of budget receipts.

At the same time, it is noted that the fund will be able to provide these receipts already in the first half of 2021, in the event that coordinated opposition from law enforcement agencies and oligarchic groups stops.

“The SPF strongly condemns any attempts to stop and roll back the privatization of public property by law enforcement agencies, former shadow owners and oligarchic groups. Any attempt to put illegal pressure on enterprises threatens the process of building a market and investment attractive economy in Ukraine. Denationalization of the economy is a priority for the president and government of Ukraine, as well as part of Ukraine’s international obligations,” Sennychenko said.

It is reminded that last week law enforcement officers coordinated by oligarchic groups attempted illegal pressure on the UMCC. It is also indicated that representatives of law enforcement agencies in the course of investigative actions carried out a number of unprecedented procedural violations. Investigative actions are taking place within the criminal proceedings registered in August 2020, even before the allegedly illegal actions were committed. According to the fund, this episode is part of a large campaign to put pressure on the UMCC and discredit the enterprise. For several months, the management of the UMCC has been accused of allegedly supplying products to the occupied territories, and in the spring of 2020, the management experienced intimidation: the attackers resorted to setting fire to the car of one of the company’s leaders, and also stole working documentation and equipment.

At the same time, it is noted that the UMCC showed record indicators of net profit in 2020, namely, UAH 600 million, which is six times more than in 2018 and 2019. The process of placing the company for a transparent auction is in its final stage. It is expected in the first quarter of 2021 and promises to be the largest privatization in Ukraine since the sale of Kryvorizhstal. The privatization of this asset is also provided for in the Memorandum of Ukraine with the IMF. In particular, 16 leading foreign companies expressed their preliminary interest in the privatization auction. The starting price is expected to be several billion hryvnias.

© 2021 Interfax Ukraine

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