Gas was bought two months before the hiring of Favorov – ERU Trading about the scandal between the tops of Naftogaz

The contracts to which Yuriy Vitrenko refers were signed in September 2018, two months before Andriy Favorov joined NJSC Naftogaz.

Today, the media circulated documents signed by Yuriy Vitrenko, executive director of NJSC Naftogaz, who accuses the new director of the gas business NJSC Andriy Favorov of having a conflict of interest. One of the arguments in favor of his suspicions Vitrenko called the fact that the company ERU Trading, in which Favorov worked before Naftogaz, bought gas at “reduced prices”.

ERU Trading Llc., a subsidiary of the American ERU Corporation, published its explanation of the situation. It notes that gas purchase transactions from Naftogaz Trading in November – December 2018 were conducted on the general commercial terms, under which gas was offered at the market:

“JSC Ukrtransgaz gas supply agreements mentioned in the published materials signed by Mr. Vitrenko, were concluded on the procedures of public procurement, held in September 2018, so, until the moment when Mr. Favorov accepted the offer to join the Naftogaz group”.

TRAFIGURA UKRINE Llc., DTEK Trading Llc., NJSC Naftogaz of Ukraine, whose commercial director at that time was Vitrenko, were competitors of the ERU Trading in the procurement.

During this period, Naftogaz Trading sold gas to at least 9 Ukrainian companies (Evroenergotrad Llc., Torgovy Dom Sokar Llc., EVRO GAZ OIL Llc., Poltava Sbyt Llc., SOE Naftogaz of Ukraine Llc., Central Gas Supply Company Llc., Metida Llc., TAS Energy of Ukraine Llc.) at prices approved by the meeting of the Board of NJSC Naftogaz of Ukraine.

“The transactions of ERU TRADING Llc. for the purchase of gas from Naftogaz Trading took place on the basis of general commercial conditions for which the resource was offered at the market, and therefore any statements about the purchase at reduced prices are not true”, the company said in response to information about suspicions of a conflict of interest.

The selection of ERU TRADING among others, according to the company, is connected with the removal of Vitrenko from the post of chief executive and commercial director in the Naftogaz group.

“The matter of concern of Mr. Vitrenko’s recommendations on revising the volumes and schedule of deliveries under contracts concluded as a result of public tenders, which in turn contradicts the essence of maintaining the independence of the GTS Operator (JSC Ukrtransgaz) from NJSC Naftogaz of Ukraine, which is now a monopolist and shareholder of JSC Ukrtransgaz. Such a position of Mr. Vitrenko does not comply with the principles of corporate governance and obligations for unbundling, the need of which has been repeatedly supported and defended by Mr. Vitrenko himself”, ERU Trading reports.

The company promises “in the coming days” to prepare a package of all documents related to the company's transactions indicated by Vitrenko and to send an appeal to the relevant authorities “in order to check the facts for the presence of corruption signs and a conflict of interests”. The company also expects that NJSC Naftogaz of Ukraine will conduct its own detailed investigation. During the press conference the Head of the NJSC Naftogaz Andriy Kobolev told on this issue.

In a common statement, ERU confirms the absence of any economic and managerial interest of Favorov in the enterprises of the group.




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Tags: gas, Naftogaz, corruption

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