The son of the fugitive ex-president can be pleased – Ukrainian courts have legalized the privatization of an energy company that is not foreign to him.
The beginning of February marked a crushing defeat for the Prosecutor General's Office in its legal battle with the favorites of the Viktor Yanukovych regime. As DS has learned, the Supreme Administrative Court rejected the Prosecutor General's Office's appeal against decisions made in April and July of this year by the Kyiv District Administrative Court and the Kyiv Appellate Administrative Court in the case of reviewing the results of the privatization of the energy generating company Donbassenergo.
"The panel of judges concluded that the trial and appellate courts fully and comprehensively examined the circumstances of the case, correctly established the nature of the disputed legal relations, and reasonably applied substantive law to their resolution," the Supreme Administrative Court stated. Thus, the court upheld the results of the tender for the sale of 60,773% of Donbasenergo shares, which took place in 2013. At that time, as DS previously reported, the range of bidders for the company was limited by the conditions approved by Mykola Azarov's Cabinet of Ministers: only companies generating and supplying electricity in an amount equal to at least 15% of Donbasenergo's total capacity, or mining coal in Ukraine in an amount equal to at least 15% of Donbasenergo's consumption, could bid for the shares. As a result, only two bidders were admitted to the auction: Energoinvest Holding, which owns the Krasnolimanskaya coal mine and is claimed to be owned by Ihor Gumenyuk, a former Donetsk Party of Regions deputy, and TekhNova, a company owned by Ivano-Frankivsk businessman Anatoly Shkriblyak, which controls the Sumy and Chernihiv Thermal Power Plants. As expected, the winner was the regional representative, "who doesn't push empty words," who paid 719 million hryvnias for the shares.
Even then, media reports began speculating that Gumenyuk was merely the nominal buyer in this deal, with Viktor Yanukovych's eldest son, Oleksandr, becoming the real owner of Donbasenergo, which operates the Slavyanska and Starobeshevska Thermal Power Plants in the Donetsk region. Both men denied these allegations, but after the change of power in the country and Yanukovych's flight to Russia, more and more knowledgeable sources began to assert that Sasha the Dentist was the actual owner of the energy company. Among them was Pavlo Zhebrivsky, the chairman of the Donetsk Regional State Administration and former head of the Prosecutor General's Office for the Investigation of Corruption Crimes, who stated that "through Ihor Gumenyuk, this [Donbasenergo – Ed.] is effectively the property of Oleksandr Yanukovych."
Last year, a DS investigation revealed that Oleksandr Yanukovych's entities were providing financial support to this company. Specifically, in June 2015, Donbassenergo's Slavyansk Thermal Power Plant received equipment from Russia worth approximately 13 million hryvnias from the Taganrog boiler-making plant Krasny Kotelshchik. Meanwhile, the customs declarations listed the Donetsk company Mako Invest, officially controlled by Oleksandr Yanukovych, as the "person responsible for financial regulation" (i.e., the actual payer for this transaction).
However, such a connection could not serve as grounds for revising the results of the privatization of Donbassenergo, and the Prosecutor General's Office, after two years, was unable to dig up evidence that the sale of this enterprise in 2013 took place with violations (in particular, that additional conditions for applicants for shares were discriminatory and illegal).
Arseniy Yatsenyuk's Cabinet of Ministers provided all possible assistance to the owner of Donbasenergo in the battle for this asset. It opposed the Prosecutor General's Office's claim, declaring that Mykola Azarov's government had acted lawfully in the privatization of Donbasenergo. The State Property Fund, headed by Ihor Bilous, took a similar position.
Theoretically, despite the fact that the Supreme Administrative Court's ruling is not subject to appeal, the Prosecutor General's Office has the chance to try to appeal to the Supreme Court (the law defines several exceptional circumstances for this).
However, the likelihood that even in this case, all court verdicts will be overturned is virtually zero. Therefore, the owners of Donbassenergo, which began generating profits last year despite its main production facilities being located in the occupied territory of the DPR, can already celebrate victory. They can also prepare to explore new horizons, such as increasing electricity exports, which they profited from last year by selling electricity to NRG Service GmbH, a company registered in Austria and owned by Hungarian businessmen László Víctor and Gábor Farkas.
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