10:50 19.01.2021

UMCC declares intention of oligarchs to regain influence over company by blocking its activities

4 min read

PJSC United Mining and Chemical Company (UMCC), which manages Vilnohirsk Mining and Metallurgical Plant (Dnipropetrovsk region) and Irshansk Mining and Processing Plant (Zhytomyr region), in recent days was under pressure from financial and industrial groups acting through corrupt law enforcement.

According to a Wednesday press release from the company, UMCC's contracts with contractors of the U.S. Boeing Corporation and leaders of the Asian market are under threat.

"Representatives of the prosecutor's office and the SBU conducted a number of unprecedented procedural violations during investigative actions. The criminal proceedings, which became the reason for the organization of simultaneous searches at the company's headquarters and at the Vilnohirsk branch, were dated August 2020, which is two months ahead of the signing of an allegedly unfavorable contract with the Asian trading company – IMMCO Trade PTE. Ltd," the company said in the press release.

Cooperation with IMMCO Trade PTE Ltd. on FCA terms is carried out at the average market price of the Asian markets, openly and transparently.

The European pricing policy differs from the Asian one, also due to the need for large-scale supply chain management. The work of companies from the European continent, such as UMCC, with representatives of the Asian market involves attracting traders for logistic reasons. This is a requirement of end consumers in most of the Far East countries.

In addition, the loud statements in the media about the allegedly conducting foreign economic activities by UMCC at low prices and the financial ties of the current management of the company with foreign buyers are exclusively fake. The ship transporting UMCC products is deliberately blocked in the port in order to impede the activities and undermine the international reputation of the company.

"The criminal proceedings, according to which recent investigative actions took place in UMCC, were opened in August 2020, while UMCC entered the contract with IMMCO Trade PTE. Ltd. two months later, in October 2020. Such direct procedural violations during the searches indicate a rush on the part of opponents of the imminent privatization of UMCC. The pretrial investigation cannot assess the legality of supplies under a contract dated October 29 last year, that is, after the information was entered into the unified register of pretrial investigations, and this important nuance was deliberately 'forgotten' by those who are now trying to put pressure on UMCC," acting Board Chairman of UMCC Mykhailo Makarov said.

According to him, in attempts to tarnish the reputation of UMCC, in particular, by submitting information about the allegedly "effective" activities of law enforcement agencies, understating the prices and cooperation with oligarchic clans, one can see direct unprecedented pressure on the privatization process in Ukraine.

As reported, on January 13, UMCC announced a new attempt to disrupt the privatization due to raids at UMCC, the head office in Kyiv and in premises of some employees of the company. "This is not the first attempt to disrupt the privatization of JSC UMCC: in August 2020, attackers unsealed 10 hopper cars of the company with ilmenite concentrate, which was shipped under a contract with the U.S. holding Chemours, and earlier that they set the company's manager's car on fire."

"The process of putting JSC UMCC for a transparent auction is in the homestretch. It is expected to be held in the first quarter of 2021 and promises the wonders of the largest privatization in Ukraine since the sale of Kryvorizhstal. The privatization of this asset is also provided for in Ukraine's memorandum with the IMF. In particular, 16 leading foreign companies have expressed preliminary interest in the privatization auction. The starting price is expected to be several billion hryvnias," the company said in a statement.

UMCC management associates the attempt to disrupt privatization with the previous management. After the arrival of the new management, the company received a record profit of UAH 600 million in 2020 compared to UAH 100 million in 2019.

 

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