Ukraine's leading English-language newspaper since 1995

Cadogan Petroleum Plc , a London-listed hydrocarbon exploration and production company whose principle assets are in Ukraine, has commenced litigation in the High Court of London against its former chief executive Mark Tolley and chief operating officer Vasyl Vivcharuk after an internal probe into potential accounting irregularities, according to a statement by the company posted on the London Stock Exchange

“The actions are the first steps in a major campaign to obtain redress for the company arising from the previously announced internal investigation of potential irregularities surrounding the procurement of and payment for certain assets and services,” the statement said.

Ukraine-focused Cadogan said the seven other defendants include companies controlled by the former executives, two suppliers to Cadogan and some individuals associated with those suppliers.

“The High Court has granted worldwide 'freezing orders' against the former executives and their companies,” Cadogan said.

Similar court orders have been made in New Zealand, Canada, Cyprus, Monaco and Jersey.

Cadogan had postponed a shareholders' meeting until November 11 because of recalling the audit report for 2008.

Cadogan doubted accuracy of records after having replaced former executives.

As Ukrainian News reported, Cadogan Petroleum dismissed chief executive Mark Tolley in March and appointed Ian Baron as the interim chief executive for three months.

In June the company relieved Vasyl Vivcharuk from his post as chief operating officer.

The company obtained 11 licenses for exploring 14 fields with the total area of 1,150 square meters.

Cadogan Petroleum placed initial public offering on the London Stock exchange in June 2008.

The company evaluated its assets and policy in Ukraine in late March after reshuffling the management and decided to refuse from developing unprofitable fields in this country.

Cadogan Petroleum incurred losses of 23.283 million ($34.03 million to the pound sterling rate on the Forex on December 31, 2008) in 2008 having raised the profit by 169.47% or 1.127 million to 1.792 million ($2.62 million) compared with the year before.

By June 17, the company's net funds had amounted to GBP 47.5 million against GBP 72 million on December 31, 2008.