Michael Bakunenko, Board Chairman of Private JSC “Mining Company Ukrnaftoburinnya”

 

A government-business partnership is one of the critical conditions for the prosperity of any country. The rules of such partnership are set out in the legal framework. And if a business starts or continues operations in the country, such rules become binding. An existing liquid business can do more than pay taxes and create employment opportunities. During the pandemic and the war, those were the companies and enterprises that helped millions of Ukrainians in every way possible to save their lives from disease or the enemy from the northeast.

A partnership works when all parties involved fulfil their obligations in good faith. This is the minimum mutual respect in business. But what happens when one of the partners breaks the rules?

Recently, the entire business community in Ukraine learned from the media about the seizure of Ukrnaftoburinnya (UNB) shares and their transfer to the National Asset Recovery and Management Agency (ARMA). I also learned about this court decision from the media. After all, neither I, as a CEO, the company as a legal entity, nor the shareholders received any inquiries. The consideration of the claim for the seizure of corporate rights took place in absolute silence. And the decision itself raises questions.

For example, I do not understand why the issues suddenly arising with a perfectly liquid company that contributes significantly to national production and pays taxes regularly cannot be resolved through a meaningful dialogue with the state.

Instead of complying with the law, why do we have a situation where private owners learn about the seizure of their assets after the fact and from the media without having been officially notified by the state authorities and without being invited to a court hearing regarding the claim for property seizure?

It is even more challenging to understand the contradictory decisions of the same court - the Pechersk District Court of Kyiv - made within a day of each other. It is difficult not to see bias and pressure from specific stakeholders in this.

Currently, UNB is a modern company, the second-largest private oil and gas enterprise in Ukraine and one of the largest 50 companies in terms of taxes paid. From 2010 to 2022 inclusive, we invested more than UAH 6 billion in the Sakhalin field, drilled about 20 new wells and paid almost UAH 24 billion in taxes and fees to the budget. In addition, in April 2023, the company made an advance payment of taxes for the 2nd quarter of 2023 in the amount of more than UAH 1 billion, demonstrating its readiness to continue supporting the state in difficult times.

For its part, the state is alienating the shares in a non-transparent and illegal manner and transferring them to the management of the ARMA, a structure whose effectiveness has raised questions even with the President of Ukraine.

I want to emphasize once again that UNB's special permits for field development are valid and obtained lawfully. We have all the necessary documents to prove this and have submitted them to the court. We are convinced there are no grounds for seizing our corporate rights and transferring them to external management.

I hope that the days of forceful interference in private business and outright violation of property rights in Ukraine are a thing of the past. And that we are not returning to the "new 90s" when the rule of the stronger takes over instead of the language of the law. But what is happening today, especially regarding the ongoing war, when the entire international community is watching the country, unfortunately, indicates the opposite.

In the meantime, the company and its shareholders call for a constructive dialogue and will continue to take all available and legal measures to protect themselves from the raider attack. We do not believe in the “new 90s”. We believe in partnership on a legal basis, just like any international investor. And so should the country that claims to be moving closer to the European Union.