US Concerned by Ukraine Cabinet Move to Dismiss Naftogaz Supervisory Board, State Dept Says

“We are deeply concerned by the Ukrainian cabinet ministers' recent actions to manipulate existing regulations to dismiss the supervisory board and replace the management of Ukraine’s leading energy company,” Price said. “This calculated move using a procedural loophole to oust well-regarded experts from the boards of several key state-owned enterprises reflects a disregard for fair and transparent corporate governance practices and complicates long-standing efforts to reform Ukraine’s energy sector and improve its investment climate.”

Ukraine's state energy company Naftogaz CEO Andriy Kobolyev said on Wednesday that he learned about his dismissal from the news and did not in fact tender his resignation. Earlier on Wednesday, lawmaker Olga Vasilevskaya-Smaglyuk wrote in her Telegram channel that the cabinet fired Kobolyev.

“Unfortunately these actions are just the latest example of ignoring best practices and putting Ukraine’s hard-fought economic progress at risk,” Price said. “We will continue to support Ukraine in strengthening its institutions including advancing democratic institutions and corporate governance reforms but Ukraine’s leaders must do their part as well.”

The decision was triggered by the review of the company's performance in 2020. According to the statement, the net consolidated loss of the Naftogaz group of companies was estimated at 19 billion hryvnias (about $680 million) as opposed to the predicted profit of 11.5 billion hryvnias.

In light of the losses, the company's shareholders viewed the work of the supervisory board and the management board as "unsatisfactory." The new chairman will be tasked with "systematically increasing Ukrainian gas production, as well as assisting in the formation of a full and fair gas market in Ukraine."