Yet “revolutionizing” energy market transformations do not exactly conform to the law
Vice Premier Yuliya Tymoshenko spent May 15 in London, promoting her project under the tentative name Energy Market Reform before the EBRD. In her opinion, the project will create a transparent and clearly demonopolized system of energy deliveries and payments.
Later, Ms. Tymoshenko told Interfax Ukraine that other issues were considered, among them energy distribution companies [known as oblenerho in Ukraine]. In her own words, the Ukrainian government believes that their privatization, involving strategic investors, will make it possible to develop an effective energy payments vehicle. Whether she succeeded in convincing the European bankers that this would really be so remains unknown. One thing is certain: foreign investors in Ukraine are seriously worried about the Vice Premier’s methods to carry out her “revolutionizing transformations” in the energy market.
Two weeks before her trip to London, Ms. Tymoshenko instructed Oleksandr Bondar, head of the State Property Fund of Ukraine, to “solve the matter of dismissing the manager of the Luhanskoblenerho Company” so as “to secure the interests of the state generating companies.” Mr. Bondar, in turn, issued the appropriated directive and the local authorities carried it out on May 10 using brute force.
Incidentally, one of the Luhanskoblenerho stockholders (the Ukrainian government holds a mere 25% interest) is Brown & Robbins Investments L.L.C. This company regards the event as a flagrant violation of the laws currently in effect in Ukraine.
In a letter to Premier Viktor Yushchenko, the company leadership notes, among other things, that SPFU cannot ignore the legitimate right of other company members to attend stockholders’ meetings and that only such meetings have the prerogative to appoint and dismiss the chairman of the board of Luhanskoblenerho. The fact that the state, local executive and law enforcement authorities seized and are holding the distribution company’s premises is regarded by the said company as a blatant violation of the laws of Ukraine and as an interference in the firm’s internal affairs. This is further regarded as an unprecedented act of violence and lawlessness. The foreign investor intends to make the event known to the US government and Kuchma-Gore Commission. This investor further intends to communicate the bad news to all potential investors in Ukraine.
Much to Viktor Yushchenko’s credit, the Premier immediately instructed First Vice Premier Yuri Yekhanurov and SPFU head Oleksandr Bondar to “correct breaches of the existing legislation forthwith and in all further actions strictly abide by the norms of the laws currently in effect in Ukraine.”
Yet a press conference organized by Luhanskoblenerho in Kyiv was told the Premier’s directive is still to be carried out. Interestingly, in the course of inquiry, Mr. Yushchenko asked Ms. Tymoshenko about her motivation concerning Luhanskoblenerho. Eyewitness accounts have it that she replied, “If the Prosecutor’s Office remains inactive I have to take over its functions.” What is this? Abuse of office, something Ukrainian courts have long gotten used to? Or could it be the old Bolshevik notion of “revolutionary expedience,’ meaning that the law is irrelevant if the commissar knows best? Most likely the latter is the case, considering that the Luhansk authorities also ignore two court rulings explicitly forbidding any actions in compliance with Oleksandr Bondar’s directive. It would be interesting to know whether Yuliya Tymoshenko included an account of the Luhanskoblenerho incident in her EBRD presentation and whether she put on a prosecutor’s robe before meeting with the European bankers.
COMMENTARY
People’s Deputy Kostiantyn ZHEVAHO:
Three and a half months ago Ukraine joined a legal convention where it is set forth that such matters are to be handled by the Luxembourg Court for Property Rights. From what I know, Brown & Robbins have prepared appropriate documents for a lawsuit, and the title is Brown & Robbins vs. Ukraine. A foreign court will teach us to respect our own laws! The greatest danger is that such self-styled prosecutors may bring us back to the ill- famed tribunals that decided people’s destinies under Stalin. This is precisely where Yuliya Tymoshenko is headed with her energy market reform theories and practices.
