The government’s attack on stock traders’ rights continues. This is the conclusion of the Association for the Protection of Shareholders’ Rights (APSR). In his interview with The Day, APSR President Yakiv Holdenberh pointed out the situation at Okhtyrkanaftohaz (Okhtyrka Oil & Gas), as one example of the government’s racket in shareholders’ rights.
According to a resolution adopted by the Cabinet of Ministers in September 1997, the State Property Fund of Ukraine raised the issue of withdrawing Okhtyrkanaftohaz from the structure of the Ukrnafta (Ukrainian Oil) joint-stock company, to be considered at the Ukrnafta shareholders’ meeting. The first meeting of shareholders already turned down the proposal, but under pressure from the Cabinet of Ministers, and apparently the Premier himself, the SPFU decided to take a second shot. At the same time, according to Mr. Holdenberh, the SPFU violated the statutory terms established for putting additional questions on the agenda. The second Ukrnafta shareholders’ meeting is to be held on June 3.
Holdenberh said that if, under government pressure, the shareholders agreed upon Okhtyrkanaftohaz’s transformation into an independent joint-stock company this would call forth a decline in the market of corporate securities, the leader of which is Ukrnafta. Its smooth formation was already hampered by regular violations of the law by state bodies, particularly in the field of proprietary rights, said Holdenberh.
Comment
OKHTYRNAFTOHAZ PULLS OUT OF UKRNAFTA: HOW BAD IS IT FOR UKRAINE?
The Day’s Economics Department explains
This withdrawal will undermine Ukraine’s oil industry, because Okhtyrnaftohaz is using the richest oil fields and has since 1990s shared 50-55% of Ukraine’s oil extraction. As a result, the remaining enterprises and those already out of Ukrnafta’s control will lose much of their competitiveness on the Ukrainian market Prospecting works will be reduced and this, in turn, will badly affect the industry’s resources. This withdrawal will be also severely demanding on Okhtyrnaftohaz, in that it will be faced with unaffordable expenses to build its own infrastructure (service and oil and gas processing installations). In addition, even disregarding the ecological consequences from Ukrnafta’s split-up in Ukraine’s western territories where all ecological programs are now financed by the company’s unified funds, the main result will be an exodus of investments and investors from the Ukrainian stock market, because this separation will make quite an impact on many still there and will further dampen Ukraine’s image in international financial quarters.
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Exploration for new oil deposits is very expensive. By breaking up Okhtyrka Oil and Gas Ukraine is supporting a growing deficit of known reserves







