The Kyiv Economic Court on July 30 reversed the sale of a 25 percent stake in Dniproenergo, the nation’s largest thermal power generating company, which belongs to Ukraine’s richest billionaire Rinat Akhmetov through his DTEK energy conglomerate.
The court ordered DTEK to return quarter ownership of the
power company to the state.
DTEK, which currently owns 73.5 percent of the power
generating company, said it will appeal the decision, according to a statement
published on its website on July 30.
Prosecutors initiated litigation in April to revoke the
privatization of the 25-percent stake in Dniproenergo, as well as state-owned
shares in another thermal power generator, Donbasenergo, and regional
electricity distributor Zakarpattyaoblenergo.
They had argued that the bidding process was rigged in favor
of certain companies, which prevented other potential investors from offering
bids, causing losses to the state budget.
DTEK, which was the sole bidder for the Dniproenergo shares
in March 2012, rejected the assertions in its statement, saying the stake was
purchased in “full compliance with the law at an open competition, at a price
that the State Property Fund offered based on an independent appraisal.”
Citing its lawyer in the case, Serhiy Piontkovsky of Baker
& McKenzie, DTEK stated that prosecutors could not provide one “iota of
evidence of damage caused to the state or that the nation’s interests were
violated” as an outcome of the privatization.
The ruling “casts doubt on the protection of property rights
and investment in Ukraine” Piontkovsky said.
According to investment house Dragon Capital, DTEK’s price
offer was 26 percent above the market price at the time of the sale, or $98.40
per share. Dniproenergo accounts for a third of DTEK’s power generating
capacity and output, Dragon said
“While we believe the Dniproenergo case is far from being
won by the Prosecutor General’s Office… we find the court ruling risky for
Ukraine’s energy system in general, as it could lead to further coal supply
disruptions and, on a broader scale, and do further damage to the domestic
investment climate,” Dragon said.
Prosecutors, however, lost their court cases to reverse the
privatization of state-owned stakes in Zakarpattyaoblenergo and Donbasenergo.
The state sold a 60.8-percent stake in Donbasenergo in August 2013 to Energoinvest Holding, which was founded
by Donetsk businessman and former Party of Regions member of parliament Ihor
Humeniuk.
Fifty percent in Zakarpattyaoblenergo was sold in February
2012 to Energetychna Ukraina, which is part of VS Energy group controlled by
Russians Alexander Babakov and Yevgeny Giner, according to Forbes Ukraine
magazine.
They subsequently sold the stake to Kyiv businessman Ihor
Tynnom, who according to Forbes, acts in the interests of Dmytro Firtash’s
business partners: Ivan Fursin and Serhiy Lyovochkin.
All three privatizations took place under the truncated
presidency of Viktor Yanukovych.
Kyiv Post editor Mark
Rachkevych can be reached at [email protected].
