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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

Mykola Naboka: “One of the conditions of my contract is non-disclosure of its conditions”

3 July, 1999 - 00:00

The Mykolayiv Alumina Plant (MAP) has held a meeting
of the joint-stock company board of directors, first deputy chairperson
of the National State Corporate Rights Agency Olena Koval told The Day.
The meeting discussed the agenda of the meeting of share-holders slated
for September 16.

According to Ms. Koval, the board of directors intends
to raise at the share-holdersХ meeting the question of indexing authorized
capital by the value of fixed assets indexing. “The National Agency has
relevant instructions from the President and the government,” Ms. Koval
said.

As experts claim, such an operation is usually conducted
to reduce the block of shares belonging to one of the largest plant owners.
“They simply float fake shares,” a chief of the securities department at
a large bank told The Day, “so the largest block grows and the rest
slim down.”

But the National Agency, according to Ms. Koval, is worried
over the fact that many MAP employees “were forced to sell their shares;
of course, there was no arm-twisting, but selling the shares was set as
a condition for non-dismissal from the enterprise.” And now, Ms. Koval
said, indexing is underway, and those who sold their shares are in an unenviable
situation, for they could have gotten much more if they had kept them intact.
However, the commendable sympathy for the cheated share-holders clearly
disguises an intention to split the collective and diminish the clout of
the former general manager Vitaly Meshin. It should be recalled that Mr.
Meshin heads MAP Work Collective Ltd., which owns a 26.4-% stake in the
enterprise (Chairman of the National State Corporate Rights Agency Oleh
Taranov, referring to unofficial information, affirms that Mr. Meshin owns
40% of MAP authorized capital).

Expert at the Alpha Capital company Olena Hrechaniniva,
commenting by request of The Day on the consequences of indexing
the authorized capital of Mykolayiv Alumina Plant PLC, said: “Indexing
is carried out when large structural units enter or leave the company.
And, since we can learn nothing concrete about MAP, this is most likely
being done for the purpose of sale.” Under all other scenarios, according
to Ms. Hrechaninova, there is no sense in raising the authorized capital
value, for this will cause depreciation charges and the tax on profit to
increase.

Meanwhile, the Korabelny District Court in Mykolayiv is
to pass a decision on August 2 over the suit of the former MAP general
manager Meshin against the National State Corporate Rights Agency, in which
he seeks reinstatement into office. In an interview with UNIAN, Mr. Meshin
expressed confidence that he “will manage to uphold his legitimate rights.”

Vitaly KNIAZHANSKY, The Day

The following is Mykola NabokaХs opinion about the comments
on him and the situation around the MAP.

“Some Ukrainian mass media (The Day, Zerkalo
nedeli) have made public the contents of letters from the current manager
of the Don Ore-Enrichment Works and first vice-president of TNC Kazkhrom
Ltd., which characterize Mr. Naboka in an extremely negative light and
note, in particular, that you made Фa sizable contribution to ruining the
industrial potential of Kazakhstan,Х and in fact ran away from the enterprise
after TWG had been expelled from Kazakhstan, and that you were fired for
absenteeism, but it was impossible to make a respective entry in your employment
record because the record was not duly presented, and so on. Would you
comment, please?”

“I read these letters. The people who wrote them are very
well aware of what was really happening in Kazakhstan. At least until 1997,
TWG had been pursuing a consistent policy, and its activities raised no
objections from the authorities. Then the brothers Chorny, who headed TWG,
disagreed on a number of points, and the controlling shares were simply
divided between them. TWG is said to have been expelled... But the elder
brother Chorny stayed behind in Kazakhstan and has continued his activities,
the only trouble being he has no right to use the previous abbreviation.
However, it was not common practice to show interest in such details, so
I did not show any. My task was to put out products. So during the first
year of my work as general manager of the Don Ore-Enrichment Works, output
rose twofold and the enterprise became prosperous. We paid our wage and
budget debts in a month, and we settled our scores with creditors in within
a year. The fall in fact began after my resignation: 40% in 1998. Besides,
many accusations leveled against me concerned the contractual provisions
which I scrupulously followed. For example, I could have done some operations
at the expense of current assets, but the contract stipulated strict conditions
for investment, so I had to borrow credit. Now I am being blamed for this.

“As to my Фescape,Х when I was being appointed general
manager of the Don Ore-Enrichment Works, I signed a contract with a structure
within the TWG sphere of influence, a branch registered in Belgium. This
is not a CIS resident, so I was being employed according to their rules:
no employment records were required of me. And when the events occurred,
also concerning the Don Ore-Enrichment Works, I merely complied with the
requirements of the structure that had signed a contract with me. I was
called off, for after the redistribution of share blocks, the management
was to be appointed by other co-owners, but I did not fit in with that
pattern.”

“Was the reason for calling you off explained to you?”

“But what was there to explain? Otherwise, I would have
been fired the way managers of other enterprises were: with two hoursХ
notice. But I was lucky: I was on vacation, so I avoided this procedure.
By the way, I was called off, but not dismissed, from the post of general
manager. The contract was abrogated as late as March 1999, when I began
negotiations in UkraineХs government circles about my future appointment
at MAP. And now I have labor relations with no other structures except
the National State Corporate Rights Agency.”

“Nevertheless, there was tepeated mention, including
in the aforementioned letters, about a criminal case being opened against
you.”

“I think I will have to seek satisfaction from those people
who talked about opening a criminal case against me. I believe Kazakhstan
is a rule-of-law state, and I would at least have been notified of the
case. But I have no idea of this. There can be no case at all: it is just
impossible to steal over there even if you are inclined to this by nature.
And I am a different person by nature, too.”

“Assuming office, you said: Фwe have money to pay wage
arrears and make other payments.“

“Yes, we do have money to make the payment of all current
expenditures, including redemption of wage debts. Which the first week
of my work showed.”

“What do you mean by “we”?”

“The enterprise. The plant has no money in the usual sense
but also has an opportunity to live at the expense of current earnings.
And we have launched this scheme. We signed a pilot contract on the supply
of 15,000 tons of alumina to the Krasnoyarsk Aluminum Works (KAW): money
has been obtained and shipment has begun. If the situation around the plant
calms down, we will have signed a long-term contact with the KAW by the
end of the year, which will have a number of valuable advantages. We have
begun to work on a pre-payment basis and at a normal price.”

“Did you bring over a team of your own? If so, what
kind of people are they?”

“I was well aware that I could not possibly rely on the
assistance of the former and present-day employees here. And so it happened.
So I requested the former Soyuzaluminium Association to help me form a
team with which I could quickly assess the situation, for I could not cope
with this alone. I was reluctantly given the necessary information. Those
who refused point-blank to cooperate were dismissed, and the rest of the
former employees work well. I also have a team of analysts and auditors
who completely assessed the situation in a week, which allowed us to re-write
contracts and become the owners of bauxite shipped to us by sea. 95% of
these people are here temporarily. They will leave as soon as they make
sure that the mechanism has been brought into play and the process is manageable.
And 2-3 persons will stay behind until Western standards of management
are introduced.”

“How did the events of the past few weeks affect the
image of the enterprise?”

“Instability did not promote the image. We felt this by
the attempts of freighters to raise the price bar, but we made them retreat
to initial positions. But this especially reflected on sales: no one so
far ventures to sign long-term contracts because it is very hard to expect
them to be implemented.”

“What is your attitude to the widely-spread opinion
that your appointment is connected with attempts to hand MAP over to TWG
in exchange for financing the election campaign of one of the candidates
for President of Ukraine?”

“If it were a question of handing over, the form would
be different: this could be either the sale or the transfer of controlling
shares. But, as you see, neither has been done.”

“But Verkhovna Rada has imposed a moratorium on MAP
privatization.”

“But the executive power could ignore this moratorium,
for it was documented as a resolution, not a law. At the same time, parliament
passed, as a law, the program of privatization for 1999, so the executive
could have taken advantage of the law. Besides, management conditions are
very strictly stipulated in the contract, and, in case of non-compliance,
the contract with me can be cancelled.”

“To what extent will your MAP general management depend
on who will be elected president of this country?”

“No doubt, since this is a state-run business, the President
may appoint a candidate of his own if he deems it necessary. To what extent
this procedure will fit in with the law if I do all my duties, is a different
question. But, naturally, I am not going to apply the methods used by my
predecessor. If I do not suit the state leadership, I will take my briefcase
and go quietly.”

“Do you suit the current leadership?”

“It is difficult to say so far, for it is not easy to make
an impression in a weekХs time. I have not met the President and I do not
know his opinion. I have only once met the Prime Minister (by the way,
we used to work in the same ministry on similar posts). We talked about
my professional qualities and about the extent to which I can carry out
a smooth transition. I said I am able to do so. There are many people in
Ukraine who could cope with my duties, in purely technological terms, as
successfully as I can. But there are no people who could link deliveries
and sales without incurring losses. And, of course, personal contacts should
also be reckoned with.”

“What are the conditions of your contract?”

“One of the conditions is non-disclosure of contractual
conditions. Naturally, I cannot talk about them С this is the prerogative
of the chairperson of the National State Corporate Rights Agency Oleh Taranov.”

Incidentally

“Information is coming in from Kazakhstan, which characterizes
Naboka not very well,” Security Service chairman Leonid Derkach said July
16, addressing regional media staff, “It concerns his work at the Don Ore-Enrichment
Works, the way he left that place С he was dismissed for absenteeism. I
do not think this is a good character reference for a manager who has taken
over the plant.”

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