Kropachov plans to "extract" 360 million hryvnias from the budget: "Centrenergo" faces prolonged lawsuits

Kropachov plans to "extract" 360 million hryvnias from the budget: "Centrenergo" faces prolonged lawsuits

The panel of judges of the Cassation Commercial Court of the Supreme Court denied PJSC "Centrenergo" the initiation of proceedings in the case of a countersuit by "Centrenergo" against the coal business structure of Petro Poroshenko’s era businessman and his associate Ihor Kononenko, Vitaliy Kropachov, represented by LLC "Shakhtarsktrans".

This became known from the materials of the commercial dispute.

A lawsuit by "Shakhtarsktrans" against "Centrenergo" for the recovery of 362.8 million hryvnias of debt for coal supplied under contracts is pending before the Commercial Court of Kyiv. The judicial proceedings were initiated in September of last year. A month later, "Centrenergo" filed a countersuit to terminate the coal supply contracts, claiming that Kropachov’s firm allegedly supplied substandard coal to the thermal power plants. However, both the Commercial Court of Kyiv and the Northern Commercial Court of Appeal returned the lawsuit to the applicant due to the 15-day deadline being missed, and no motion for an extension was filed.

In cassation, representatives of "Centrenergo" demanded the annulment of the court decisions and the transfer of the lawsuit’s consideration to the court of first instance, arguing that the deadlines were missed for legitimate reasons, and the absence of a motion for an extension is not a basis for returning the lawsuit.

The panel of judges of the Cassation Commercial Court concluded that the courts of previous instances made the correct decision, the lawyers’ claims were unfounded, and denied the applicant.

It should be noted that if the courts had accepted the countersuit for consideration, it could have at least delayed the consideration process of the "Shakhtarsktrans" lawsuit. A decision in favor of "Centrenergo" and the annulment of the coal supply contracts could have been grounds for closing the judicial proceedings on the lawsuit by Kropachov’s firm altogether. Now, however, "Centrenergo" will have to litigate with "Shakhtarsktrans," which creates a risk of losing 362.8 million hryvnias if the court decision is in favor of the latter.

It is worth noting that Vitaliy Kropachov’s structures "Shakhtarsktrans" and "Ukrdoninvest Trading" have been suing "Centrenergo" since it was taken under the control of Ihor Kolomoiskyi, and PJSC "Centrenergo" refused to accept coal from Kropachov’s firms and pay for already supplied coal. The amount of claims in the "Ukrdoninvest Trading" lawsuit is 1.4 billion hryvnias.
It should be noted that the lawsuits with "Centrenergo" are part of Kropachov’s unrealized plan for the privatization of this enterprise, 78.2% of shares of which are owned by the State Property Fund of Ukraine. His structures "Shakhtarsktrans" and "Ukrdoninvest Trading" seized the supply of coal to the enterprise, effectively destroying the state operator of the Wholesale Coal Market, SE "Derzhvuglepostach".

In parallel, the oligarch’s structures were depleting funds from state mine enterprises due to the monopolistic position on the market obtained during Poroshenko’s presidency, inflating the cost of coal enrichment, and supplying mining equipment at significantly inflated prices within the joint project with the Chinese machinery giant "Sany Ukraine".

Kropachov’s firm "Ukrdoninvest" participated in the privatization of "Centrenergo," but the State Property Fund excluded it from the competition, and subsequently, the privatization was completely canceled. In September 2019, Kropachov, with the help of the court, achieved the annulment of the State Property Fund’s decision to exclude it from the competition, but at the same time, the courts lifted the ban on the privatization of PJSC "Centrenergo," imposed within the framework of the "Ukrdoninvest" lawsuit’s security measures.

After that, the company filed a lawsuit in the Commercial Court of Kyiv demanding the State Property Fund conduct a new auction and include the firm in its participants. As part of this lawsuit’s security measures, Judge Iryna Borysenko again imposed a ban on the privatization of "Centrenergo". However, the State Property Fund managed to lift the ban through the court, and the prosecutor’s office opened a criminal case against Judge Borysenko for the fact of making a knowingly unjust decision.

For the privatization of "Centrenergo," the auction for which the State Property Fund wants to start at six billion hryvnias, Kropachov currently lacks the funds—his enrichment plants are currently idle, and in the coal enrichment market, he is confidently being pushed out by former MP from the "Party of Regions", Andriy Orlov, with support from Ihor Kolomoiskyi’s associates. Before this, Kropachov also relied on resources from his partners at China’s Sany Heavy Equipment Co., but they abandoned the idea of joint business with him when he lost influence in Ukraine’s energy sector.

Moreover, together with PJSC "Centrenergo," the State Property Fund plans to privatize SE "Krasnolymanska" as a package, which has not mined coal since March 2018—miners of the enterprise work at the co-located LLC "Krasnolymanske," owned by Kropachov.