Court headed by graft suspect suspends ruling on Naftogaz CEO
Ukraine’s most controversial court on June 18 blocked an order to fire the new CEO of state hydrocarbon monopoly Naftogaz, Yuriy Vitrenko.
In April, the Cabinet of Ministers fired former Naftogaz CEO Andriy Kobolev and replaced him with Vitrenko. Naftogaz and Ukraine’s western partners criticized the dismissal, saying it violated Ukraine’s corporate governance norms.
On June 15, the National Agency for Preventing Corruption (NAPC) ruled that Vitrenko’s hire was unlawful and ordered the Cabinet to cancel it.
Days later, the Cabinet successfully appealed the ruling in the Kyiv District Administrative Court, which is headed by the notorious judge Pavlo Vovk. Vovk has been charged with graft in multiple criminal cases.
Vitaliy Shabunin, head of the nonprofit Anti-Corruption Action Center, believes that the court’s decision is Vovk’s quid pro quo deal with the parliament’s legal policy committee, which doesn’t want the NAPC’s order to succeed.
The committee has blocked for two months President Volodymyr Zelensky’s bill that would have shut down Vovk’s court for good. The committee is controlled by Zelensky’s party.
“The Kyiv District Administrative Court is a puppet court that complies not with the law but with the orders of those who are stronger,” Shabunin said on Facebook. “If Zelensky thinks that he will use the court in his interests, this court will be the first one to betray him later.”
The court and the President’s Office did not respond to requests for comment.
Naftogaz CEO controversy
The government fired Kobolyev on April 28, citing Naftogaz’s “unsatisfactory” results last year. The company posted a loss of nearly $700 million for 2020.
Firing the CEO requires the supervisory board’s approval. To get around it, the government temporarily suspended the board. This attracted a lot of controversy and the board members resigned en masse, in protest.
Several board members, including the board’s chairwoman, Claire Spottiswoode, later agreed to return temporarily.
The G7 countries issued a joint statement on Twitter, saying that “effective management of state-owned enterprises, free from political interference, is crucial for Ukraine’s competitiveness, prosperity and fulfillment of its international obligations.”
On June 15, the NAPC ruled that Vitrenko shouldn’t be the CEO of Naftogaz and ordered his dismissal.
Vitrenko served as acting energy minister from December 2020 to the end of April and influenced Naftogaz policy in that capacity. The NAPC said that his Naftogaz appointment violated a statute that requires a year to pass before a departing official who has had power over a state enterprise is allowed to get a job at that enterprise.
Naftogaz responded that NAPC’s order is illegal and will be challenged in court.
However, Spottiswoode reportedly stated that the company’s decision to appeal the NAPC’s order was initiated by Vitrenko personally, without consulting the management or supervisory boards.
Ukraine’s shadiest court
Vovk’s Kyiv District Administrative Court, which suspended the NAPC’s decision on Naftogaz, is arguably Ukraine’s most controversial court. It has issued many rulings that were criticized as dubious, unlawful or corrupt.
In July 2020 Vovk and other judges of his court were charged with organized crime, abuse of power, bribery and unlawful interference with government officials.
For months, Vovk has ignored the National Anti-Corruption Bureau of Ukraine’s summonses. When the NABU tried to use court warrants to bring Vovk to bail hearings by force, the judge always hid from the bureau.
The bureau has for months asked Prosecutor General Iryna Venediktova, a Zelensky loyalist, to authorize an arrest warrant for Vovk but she refused.
In March Andriy Bitsyuk, a judge at the High Anti-Corruption Court, refused to extend the corruption investigation against Vovk. According to the Criminal Procedure Code, prosecutors had to either close the investigation or send it to trial within five days. However, the case was not sent to trial within five days and is likely to be closed.
In April the NABU also arrested Vovk’s brother Yury Zontov, an employee of the Foreign Intelligence Service. He was charged with receiving a $100,000 bribe as an intermediary for Vovk.