Ukrnafta minority shareholders demand Ukraine pays $5 bln

Photo: Reuters

Three Cypriot companies – minority shareholders in public joint-stock company Ukrnafta – have demanded that Ukraine pays $5 billion in compensation for the actions of the Ukrainian government and national joint-stock company Naftogaz Ukrainy.

A copy of the letter from Littop Enterprises Ltd, Dridgemont Ventures Ltd and Bordo Management Ltd, which was sent to Energy and Coal Industry Minister of Ukraine Volodymyr Demchyshyn, has been published by zn.ua.

In the letter, the Cypriot companies said that Ukraine restricted Ukrnafta from freely selling gas ending stocks on the market in 2006-2014, despite the availability of court rulings.

The companies also said that due to the restrictions Ukrnafta does not have enough funds to fully cover its tax liabilities, and that the State Fiscal Service accrues fines, putting the effective operation of the company under threat.

"The government is committing deliberate actions, blocking the opportunity of Ukrnafta to distribute its own resources on one hand and applying additional sanctions against Ukrnafta using the State Fiscal Service on the other," reads the letter.

The companies’ minority shareholders proposed that Ukrainian representatives contact them to settle the dispute in an amicable way, and will wait to hear from them for three months. Otherwise, they plan to file a claim with the international arbitration court, with reference to the conditions of the agreement on Ukraine joining the Energy Community.