Even if an enterprise works well, it still owes somebody...
Law-enforcement bodies have arranged an information leak about some Kryvorizhstal (Kryvy Rih Steel Mill) executives being sued.
As Interfax-Ukraine reports, the exposed offenses include 20 cases of major embezzlement, 4 of bribery, and 4 of office abuse. According to a source in the law-enforcement bodies, a total of 60 persons, including some current executives, are being sued in connection with this. Six persons have been arrested. Among the solved offenses are mainly the supply of products without pre-payment, barter operations at underrated prices, and the delivery of raw materials to the mill at overrated prices, i.e., all that has become common practice at Ukrainian enterprises, not yet finally stifled by non-payments.
What caused the special interest of law-enforcement bodies in Kryvorizhstal, further confirmed by a far-from-accidental leak of information? According to one version, a mean joke was played upon the mill by the proposal of the Austrian Windsor Trading company to extend a large loan ($110 million in two installments) to be paid for with products of the mill under conditions unfavorable to the latter. President's aide Volodynyr Ryzhov said to The Day in early July: «The point is we don't know how to take the offered money on time. It was offered as long ago as April 20.»
«So what is to be done?» The Day's correspondent asked.
«Fire this crook,» said the President's aide.
But the Monday before last he told The Day he knew nothing about Kryvorizhstal criminal cases.
«Why not find out?»
«I don't want to.»
A comprehensive inspection by the law-enforcement bodies was perhaps the act of revenge. It began, as Interfax-Ukraine reports, on July 7 by government instruction, i.e., almost immediately after the loan situation reached deadlock. Chief of the Kryvy Rih economic crimes department Petro Mialyk told correspondent Natalia Sokurenko that about 40 cases have been opened following the Kryvorizhstal inspection.
«I know nothing about arrests and lawsuits,» assistant general manager of Kryvorizhstal Yevhen Auer told The Day's Inna ZOLOTUKHINA. He also stressed: «The mill works normally. On July 4 it celebrated the 65th anniversary of its foundation and was awarded a Diploma of Honor by the Cabinet of Ministers of Ukraine. By the way, a special commission worked recently at Kryvorizhstal, and, as far as I know, found no serious errors.» Kryvorizhstal general manager Volodymyr Nechyporenko told The Day : «Out of UAH 92 million owned to the state budget, the mill has paid UAH62 million.»
It will be recalled that the presence of a government head at an enterprise jubilee used to amount to a pardon granted to the manager till the end of his life (to be more exact, till the death of the Party Secretary- General). Anyway, we also observe something of the kind today. However, this time this did not work: probably, Mr. Pustovoitenko did not like the reception he got (word has it somebody wrote inappropriate words on the fresh asphalt laid in honor of the distinguished guest, and the road cover had to be urgently replaced), or somebody acted counter to the premier's wishes.
First Deputy Minister of Industrial Policy Serhiy HRYSHCHENKO says:
«I hear for the first time about criminal cases at Kryvorizhstal. The prime minister and I came back from Kryvy Rih, where we attended the 65th anniversary celebrations, only on Friday evening.»
«And was everything in order there?»
«Total order is a rare thing at a large enterprise like this. I won't keep secret the fact that Ministry of the Interior officials indeed looked into some matters and checked the mill's economic and financial activities. Investigation materials were handed over to the prosecution office which might have made a certain decision. But I know nothing about this.»
«Is the law enforcement ‘assault' on Kryvorizhstal the result of its failure to accept the $110 million loan?»
«Indeed, the loan problem was discussed. Kryvorizhstal confirmed its readiness to receive it (on its own terms — Ed. ). The ministries of industrial policy and of finance wrote to that company (Windsor Trading, if my memory doesn't fail me) that, when this credit line is opened, and a respective credit agreement is signed and approved by the Cabinet of Ministers, the ministries will do the needful... But Windsor replied they had some complications and decided to insure their credit with Lloyd's. Today we have neither their confirmation of the credit nor their refusal. I phoned them twice. And I see no connection between this credit and the inspection results...»
Hardly could anybody say something different if he were a first deputy minister. However, reports about the results of Kryvorizhstal's performance clearly convince us that there were no other motives to destabilize the work of one of this country's successful enterprises by means of inspections and criminal cases.
Here is the evidence of an experienced metallurgist, first deputy chairman of the parliamentary committee for industrial policies, Vadym Hurov: «Nowadays, you can open criminal cases against anyone you want. But it is beyond any doubt that Kryvorizhstal has very positive achievements and is embarking on a straight road forward. They have reorganized management, although previous executives also did so many good things by joining the mill, an ore-enrichment works, and a coke-producing factory into a single complex.
«The mill is now obviously on the right track. The manager has a clear vision of objectives. A new managerial team has been set up, the chief engineer Volodymyr Sheremet also works skillfully. The mill is the first in Ukraine to apply the ISO 9002 standard to all its technologies.»
What is not clear today in the «Kryvy Rih affair» is the role of Donetsk- based commercial structures. As Interfax-Ukraine reports, the law- enforcement bodies have noted that 80% of the elements that cooperated with the mill are from Donetsk. What is criminal here? For it is from the Donetsk basin that Kryvy Rih receives the coke-making and power-generating coal. However, Kryvorizhstal is also cooperating with a Donetsk superstructure, the Energo company which has leased blast-furnace No. 8 and is drawing up a UAH1.5 billion investment program for the enterprise. As The Day 's Volodymyr Honchar reports from Kryvy Rih, it is this company that was entrusted, at a meeting attended by Messrs. Hryshchenko, Ryzhov and Hurov, with the drawing-up and implementation of the program to increase and improve the export of the mill's products. Has it now been decided to stop the «insolent» structure?
Meanwhile, the media continue to sling mud on Kryvorizhstal. On Saturday, Ukrainski novyny carried front-page information about UAH37.4 million overall losses the mill allegedly suffered in the first six months, only mentioning in the table that its sales profits were UAH52.7 million for the same period, up four times from the last year.
The Day 's experts are also inclined to favor the version that the Kryvorizhstal state-run enterprise is being prepared for privatization. (Minister of Industrial Policy Vasyl Hureyev told this to Ukrainski novyny as long ago as late July).
Chairman of the Verkhovna Rada Privatization Monitoring Commission Oleksandr RIABCHENKO thinks: «What is to blame for all this is the current state-enterprise management system. On the one hand, it totally lacks any criteria for assessing the work of a manager. On the other hand, the current legislative field is so contradictory that one can in fact sue almost every manager. The mill's previous management faced the same problems. If the government really wanted to change the existing situation, it would opt for a mass-scale privatization of state-run enterprises and the streamlining of laws, rather than for changing their managers.»
Deputy Chairman of the State Property Fund Mykhailo CHECHETOV said to The Day 's correspondent: «As a person who inspected Kryvorizhstal as part of an official commission, in my capacity of a deputy minister of economics, I am sure that this commission's recommendation on privatizing Kryvorizhstal by corporatization is quite timely. I think the Fund will take the same stand. It will be difficult to find investments other than by corporatization.» Meanwhile, a competent source which chose to hide his identity told our correspondent Volodymyr HONCHAR that a criminal inquiry had been opened into the theft of a large consignment of metal products. He also made it clear that the mill's general manager was involved in this, so he might be replaced by one of his former deputies or the manager of a certain ore-enrichment works.
There is also a different version in which Kryvorizhstal is the bone of contention between two presidential teams.
Chairman of the Kryvy Rih branch of the National Democratic Party Anatoly KOTYK said to V. Honchar:
«Today Kryvorizhstal is hosting a deputy minister who studies the situation at the mill and prepares proposals about correcting the enterprise's performance. Rumor has it that this man has been offered the post of Kryvorizhstal manager, but he allegedly has not yet accepted this offer. For the collective is against the replacement of Volodymyr Nechyporenko. On the other hand, a one-man-oriented team has been formed at Kryvorizhstal, which many do not like.»
«Oriented toward whom?»
«I don't want to reveal the name. He is a Kryvy Rih people's deputy.»
Can this be the true reason why so much hell was raised about criminal cases? For, as our common practice has it, they first remove unsuitable managers, then try to bring down the market price, shouting as loudly as possible about losses and the exposed shortcomings and abuses. Meanwhile, the suitable manager is being kept in hiding for the time being.
Law-enforcement bodies have arranged an information leak about some Kryvorizhstal (Kryvy Rih Steel Mill) executives being sued.
As Interfax-Ukraine reports, the exposed offenses include 20 cases of major embezzlement, 4 of bribery, and 4 of office abuse. According to a source in the law-enforcement bodies, a total of 60 persons, including some current executives, are being sued in connection with this. Six persons have been arrested. Among the solved offenses are mainly the supply of products without pre-payment, barter operations at underrated prices, and the delivery of raw materials to the mill at overrated prices, i.e., all that has become common practice at Ukrainian enterprises, not yet finally stifled by non-payments.
What caused the special interest of law-enforcement bodies in Kryvorizhstal, further confirmed by a far-from-accidental leak of information? According to one version, a mean joke was played upon the mill by the proposal of the Austrian Windsor Trading company to extend a large loan ($110 million in two installments) to be paid for with products of the mill under conditions unfavorable to the latter. President's aide Volodynyr Ryzhov said to The Day in early July: «The point is we don't know how to take the offered money on time. It was offered as long ago as April 20.»
«So what is to be done?» The Day's correspondent asked.
«Fire this crook,» said the President's aide.
But the Monday before last he told The Day he knew nothing about Kryvorizhstal criminal cases.
«Why not find out?»
«I don't want to.»
A comprehensive inspection by the law-enforcement bodies was perhaps the act of revenge. It began, as Interfax-Ukraine reports, on July 7 by government instruction, i.e., almost immediately after the loan situation reached deadlock. Chief of the Kryvy Rih economic crimes department Petro Mialyk told correspondent Natalia Sokurenko that about 40 cases have been opened following the Kryvorizhstal inspection.
«I know nothing about arrests and lawsuits,» assistant general manager of Kryvorizhstal Yevhen Auer told The Day's Inna ZOLOTUKHINA. He also stressed: «The mill works normally. On July 4 it celebrated the 65th anniversary of its foundation and was awarded a Diploma of Honor by the Cabinet of Ministers of Ukraine. By the way, a special commission worked recently at Kryvorizhstal, and, as far as I know, found no serious errors.» Kryvorizhstal general manager Volodymyr Nechyporenko told The Day : «Out of UAH 92 million owned to the state budget, the mill has paid UAH62 million.»
It will be recalled that the presence of a government head at an enterprise jubilee used to amount to a pardon granted to the manager till the end of his life (to be more exact, till the death of the Party Secretary- General). Anyway, we also observe something of the kind today. However, this time this did not work: probably, Mr. Pustovoitenko did not like the reception he got (word has it somebody wrote inappropriate words on the fresh asphalt laid in honor of the distinguished guest, and the road cover had to be urgently replaced), or somebody acted counter to the premier's wishes.
First Deputy Minister of Industrial Policy Serhiy HRYSHCHENKO says:
«I hear for the first time about criminal cases at Kryvorizhstal. The prime minister and I came back from Kryvy Rih, where we attended the 65th anniversary celebrations, only on Friday evening.»
«And was everything in order there?»
«Total order is a rare thing at a large enterprise like this. I won't keep secret the fact that Ministry of the Interior officials indeed looked into some matters and checked the mill's economic and financial activities. Investigation materials were handed over to the prosecution office which might have made a certain decision. But I know nothing about this.»
«Is the law enforcement ‘assault' on Kryvorizhstal the result of its failure to accept the $110 million loan?»
«Indeed, the loan problem was discussed. Kryvorizhstal confirmed its readiness to receive it (on its own terms — Ed. ). The ministries of industrial policy and of finance wrote to that company (Windsor Trading, if my memory doesn't fail me) that, when this credit line is opened, and a respective credit agreement is signed and approved by the Cabinet of Ministers, the ministries will do the needful... But Windsor replied they had some complications and decided to insure their credit with Lloyd's. Today we have neither their confirmation of the credit nor their refusal. I phoned them twice. And I see no connection between this credit and the inspection results...»
Hardly could anybody say something different if he were a first deputy minister. However, reports about the results of Kryvorizhstal's performance clearly convince us that there were no other motives to destabilize the work of one of this country's successful enterprises by means of inspections and criminal cases.
Here is the evidence of an experienced metallurgist, first deputy chairman of the parliamentary committee for industrial policies, Vadym Hurov: «Nowadays, you can open criminal cases against anyone you want. But it is beyond any doubt that Kryvorizhstal has very positive achievements and is embarking on a straight road forward. They have reorganized management, although previous executives also did so many good things by joining the mill, an ore-enrichment works, and a coke-producing factory into a single complex.
«The mill is now obviously on the right track. The manager has a clear vision of objectives. A new managerial team has been set up, the chief engineer Volodymyr Sheremet also works skillfully. The mill is the first in Ukraine to apply the ISO 9002 standard to all its technologies.»
What is not clear today in the «Kryvy Rih affair» is the role of Donetsk- based commercial structures. As Interfax-Ukraine reports, the law- enforcement bodies have noted that 80% of the elements that cooperated with the mill are from Donetsk. What is criminal here? For it is from the Donetsk basin that Kryvy Rih receives the coke-making and power-generating coal. However, Kryvorizhstal is also cooperating with a Donetsk superstructure, the Energo company which has leased blast-furnace No. 8 and is drawing up a UAH1.5 billion investment program for the enterprise. As The Day 's Volodymyr Honchar reports from Kryvy Rih, it is this company that was entrusted, at a meeting attended by Messrs. Hryshchenko, Ryzhov and Hurov, with the drawing-up and implementation of the program to increase and improve the export of the mill's products. Has it now been decided to stop the «insolent» structure?
Meanwhile, the media continue to sling mud on Kryvorizhstal. On Saturday, Ukrainski novyny carried front-page information about UAH37.4 million overall losses the mill allegedly suffered in the first six months, only mentioning in the table that its sales profits were UAH52.7 million for the same period, up four times from the last year.
The Day 's experts are also inclined to favor the version that the Kryvorizhstal state-run enterprise is being prepared for privatization. (Minister of Industrial Policy Vasyl Hureyev told this to Ukrainski novyny as long ago as late July).
Chairman of the Verkhovna Rada Privatization Monitoring Commission Oleksandr RIABCHENKO thinks: «What is to blame for all this is the current state-enterprise management system. On the one hand, it totally lacks any criteria for assessing the work of a manager. On the other hand, the current legislative field is so contradictory that one can in fact sue almost every manager. The mill's previous management faced the same problems. If the government really wanted to change the existing situation, it would opt for a mass-scale privatization of state-run enterprises and the streamlining of laws, rather than for changing their managers.»
Deputy Chairman of the State Property Fund Mykhailo CHECHETOV said to The Day 's correspondent: «As a person who inspected Kryvorizhstal as part of an official commission, in my capacity of a deputy minister of economics, I am sure that this commission's recommendation on privatizing Kryvorizhstal by corporatization is quite timely. I think the Fund will take the same stand. It will be difficult to find investments other than by corporatization.» Meanwhile, a competent source which chose to hide his identity told our correspondent Volodymyr HONCHAR that a criminal inquiry had been opened into the theft of a large consignment of metal products. He also made it clear that the mill's general manager was involved in this, so he might be replaced by one of his former deputies or the manager of a certain ore-enrichment works.
There is also a different version in which Kryvorizhstal is the bone of contention between two presidential teams.
Chairman of the Kryvy Rih branch of the National Democratic Party Anatoly KOTYK said to V. Honchar:
«Today Kryvorizhstal is hosting a deputy minister who studies the situation at the mill and prepares proposals about correcting the enterprise's performance. Rumor has it that this man has been offered the post of Kryvorizhstal manager, but he allegedly has not yet accepted this offer. For the collective is against the replacement of Volodymyr Nechyporenko. On the other hand, a one-man-oriented team has been formed at Kryvorizhstal, which many do not like.»
«Oriented toward whom?»
«I don't want to reveal the name. He is a Kryvy Rih people's deputy.»
Can this be the true reason why so much hell was raised about criminal cases? For, as our common practice has it, they first remove unsuitable managers, then try to bring down the market price, shouting as loudly as possible about losses and the exposed shortcomings and abuses. Meanwhile, the suitable manager is being kept in hiding for the time being.
Newspaper output №:
№31, (1999)Section
Economy
