Representatives of Khmelnytskoblenerho (Khmelnytsk region electricity distribution system operator (DSO) went on a protest action against the raider seizure of their enterprise.
Will the power engineers be able to withstand the raider attack?
For many consecutive years Khmelnytskoblenerho has been (and still is) a model of reliable, stable, successful and profitable work not only for the region's economy, but also for the country's energy sector more broadly. The company has always been able to keep up not only with the times, but also ahead of it, constantly introducing new technologies and modern standards of labour organisation. Thanks to the skilful tactics of the leadership, it has always been possible to find a way out of the most difficult economic situations and to overcome crises, of which there have been many.
This was the case until recently. Until a scandal suddenly erupted around the Company: the team almost derailed the announcement that the main shareholder, which is the State Property Fund ("SPF"), wants to replace the head of the company. these events unfold so unexpectedly and quickly that it is hard to understand what happened, who is interested in these dubious games, which have already been called corporate raiding.
So what is really happening at Khmelnytskoblenergo?
There is still no official answer to this question. Although formally it could be as follows: the main shareholder wants to change the head of the Company by appointing another. Well, he has a right to do so in fact. Everything would be clear if there were at least some explanations as to why the current acting CEO Oleg Kozachuk, who has been leading the company to leading positions in the industry for more than a year, has to give way to a candidate that nobody has ever heard of at the company, and more importantly, someone who cannot provide any evidence of their success in the energy industry.
Most people were outraged not even by this, but by the fact that the attempted management change took place almost secretly. Almost a month after the probable appointment of a new person acting in the post of general director (it is impossible to state definitively as no official document about the appointment has arrived at Khmelnytskoblenergo) at the enterprise itself nobody seen or heard from that individual. Instead, rumours spread that there were already attempts to change the name of the old leader to a new one in official documents and registers.
The fear that the SPF wanted to push their own person into the director's chair in violation of the law was what forced the company's representatives to protest.
The government left, the decision remained?
At the end of April, O. Kozachuk learned that he had been fired. Why at that moment, it is unclear, because it was then that he was on vacation, so under Ukrainian law it is simply illegal to terminate a person’s employment while they’re on vacation. Although in fact such “accidental” steps have been taken by the SPF before.
The question of approving the new acting General Director for Khmelnytskoblenerho was scheduled for the last meeting of the Cabinet of Ministers to be headed by then Prime Minister Honcharuk at the request of the SPFU. That government no longer exists, but the decision remains. So now there is no one to ask why the position of Acting Director was presented for approval rather than CEO. Although there are some indications why things happened in this way. In the case of appointing a CEO, the applicant should pass a transparent competition for a start. This didn’t happen, so the "acting" title meant an ability to move quickly, without undue hassle or publicity.
Additionally, bringing this issue for discussion by the Cabinet of Ministers seems in itself rather curious, as such a personnel decision should be made exclusively by the Supervisory Board, which is the only governing body. Given what happens later, it seems that the people behind the plan wanted to gain influential support. And to some extent they may have succeeded. In the future, this precedent could pave the way for actions that are sometimes questionable and sometimes against the law.
Who will oversee the Supervisory Board?
The question is not rhetorical, because it was the actions of this body that led to the current difficult situation around oblenergos. According to both legislation and the charter of the Company, there are seven members of the Supervisory Board, five of whom are representatives of the SPF, must vote for it when replacing the head of the company. But, according to the company, shortly before this recent "vote", two representatives of the Supervisory Board were dismissed. In this kind of situation they need to simply state that they no longer wished to represent the SPF as part of the Supervisory Board, and asked to be removed from it.
The next day after the resignation statements, the SPF announced their replacements. This is where another contradiction arose: you can't replace someone who has already been fired. Therefore, the Company immediately sent the SPF a notice of refusal to enact the replacements. Because, by law, new candidates must be appointed by a general meeting after having passed a competitive selection, and not approved by order of the governing body.
Lawyers are now trying to deal with procedural violations. However, in reality everything looked as if the majority shareholder had replaced those who had already left. And put those he wanted.
In view of these circumstances, the Company did not recognize the legitimacy of the new composition of the board, so it cannot consider the decision to replace the CEO, taken by that illegitimate board, to be legal. However, it seems that no one expected this agreement.
In Khmelnytskoblenergo it is assumed that such changes were made as an experiment to "smoothly" replace the heads of various regional power companies. In addition to Khmelnytskoblenergo, similar things took place simultaneously with Khmelnytskoblenerho in Centerenergo, and Kharkivoblenergo, and Mykolaivoblenergo, i.e. in four separate state-owned regional energy companies. And this is perhaps the most interesting moment.
Are the director's chairs now occupied by "their" people?
You can think a lot about why all four suddenly became targets like this. But certain analogies can be drawn when a new political team suddenly begins to carry out a rapid and total replacement of leaders in key positions in any industry. Given that we are talking about energy and the fact that these regional power companies have long been preparing for privatization, but cannot start this process for reasons beyond their control, certain conclusions are self-evident.
How is it possible, for example, to explain why Oleg Kozachuk suddenly ceased to satisfy the Supervisory Board, and at the same time the Cabinet of Ministers when he was previously considered one of the best specialists in the field? This is not a rhetorical question. His professional level and professional experience are unlikely to be suddenly in doubt. After graduating from university, he passed all career steps at Khmelnytskoblenerho, from inspector, head of the department, deputy for energy sales of Letychiv REM to head of the quality management department in the management staff and management positions in other structures. And for the past five years, he has served as the company's CEO.
In addition, it is clear that his tenure has been successful, earning him a reputation not only at the domestic but also at the international level. For several years in a row, Oleg Kozachuk has been the voting director of the Wholesale Market Council, representing Ukraine's interests in the OECD anti-corruption network during its work in Ukraine and at a summit in Paris. In addition, he remains an active participant and consultant on the introduction of a new energy market in Ukraine. For his work he received thanks from the Ministry of Energy and Coal and the honorary title of "Honoured Power Engineer of Ukraine".
Will the candidate who suddenly fell into the position of head of the team be able to boast of such a track record, and most importantly - knowledge and experience? Is he ready to work both for the sake of the enterprise and for the sake of a stable situation in the energy sphere of the whole region?
After all, the essence is not in the personal merits and awards that Oleg Kozachuk received, but in what results the team of the Society achieved under his leadership.
They work for four?
Khmelnytskoblenerho may draw a line under the old axiom that a state-owned enterprise is doomed to work inefficiently. Successful management has shown the opposite. For several consecutive years almost all planning and economic indicators have been fulfilled and exceeded here. But perhaps the most striking evidence of efficiency is the ever-growing profits of the company. Last year alone, it amounted to almost 86 million hryvnias. Is it a lot or a little? For comparison, this figure eclipses the profits of the Kharkiv, Zaporizhia, Mykolaiv and Ternopil regional power companies combined. So this is a result to be really proud of.
Instead, as a "thank you" from the SPFU and the Supervisory Board - dismissal?
It is difficult to comment on some things. I just want to add that after all these unpleasant events Oleg Kozachuk did not leave the team, and together they continue to demonstrate coordinated and effective work. Neither objective quarantine crisis processes nor destabilizing steps by the SPF were able to break them. In fact, the first quarter was even more successful than last year. Compared to last year's Q1 profit of 19 million hryvnias the same period this year exceeded 29 million UAH. And most importantly, this company works not only for itself but also for the state. If last year the enterprise paid 70 million hryvnias of taxes and this year it is expected to pay almost 109 million UAH, doesn't the state need leaders who care so much about filling the treasury?
Finally, a few more telling facts. During the year, the average salary of an electrician increased from 9,400 hryvnias to 15,000 UAH. If we take into account that the average salary of a full-time employee at the enterprise is 15,600 hryvnias, it becomes clear that there is no salary pyramid, where the lowest qualified labour force receives the least. On the contrary, the leaders made sure that those on whom, in fact, the regional power company is based, tradespeople of particular specialties, received a really decent salary.
Why success does not please everyone?
Such financial stability and at the same time technical development of Khmelnytskoblenerho should please the SPF, as they are the owner of the largest block of shares in this firm. To deserve gratitude and support from the government for the fact that the staff and the leader work so hard to support the state treasury at a time when it needs it so much should not be a matter for discussion.
And what instead? An sudden change of leader, an unexpected fight, some backstage games, and spanners in cogs? The team was not averse to hearing the opinion of the main shareholder about everything that is happening around the company. The main thing - I wanted to know in whose hands they want to give it? And for what? Or maybe someone does not like the fact that the company swells the state coffers rather than somebody’s personal accounts.
Unfortunately, neither the members of the Supervisory Board nor the representatives of the SPF wanted to come to a meeting with Khmelnytsky power engineers to talk openly about everything. They could have done this during the annual meeting of the company. Where, if not there, to hear reports on what has been done and to get acquainted with the reasoning. But as none of the mentioned representatives appeared at the meeting, there was a lack of a quorum, and no issues could be resolved. Is this now a boycott of the work of the director and the whole team?
Despite the fact that the story with the newly appointed heads has not gone away for a long time, the regional power companies still have not received any official notifications. Everything exists at the level of rumours, opinions, information obtained in different ways. But official inquiries on this matter yield no official response.
The "new manager" does not appear at the enterprise either. So sometimes there are even doubts as to whether he is even a real person? Is he ready to get to work? Will the problems of the team become a priority for him, if he does dare to eventually get acquainted with them?
Or maybe the problem is something else?
Oleh Kozachuk has publicly stated that he is not seeking to hold on to his position, but wants all procedures to take place transparently and legally. He is ready to defend himself against any illegal actions and conspiracies only in a legal and open way in court.
But, by and large, this whole story is not just about the problems of the director they want to fire. Someone should think about why all this fuss around the company started? Who is the author of this script? Who loses as a result of the successful realisation of these actions, and who gains?
