Ukrtelecom renationalisation proposed by parliamentary commission

18 Sep 2015

The Special Commission on Privatisation formed by members of Ukraine’s parliament, the Verkhovna Rada, has proposed a plan to renationalise the country’s dominant fixed line operator Ukrtelecom because of its debts to the state. Seven out of the commission’s nine MPs supported the proposal, while the other two abstained. The commission’s plan envisages Ukrtelecom being forced into bankruptcy to allow its management to be replaced before returning the company to the State Property Fund. Since 2013 the full-service telco – including wholly owned cellco TriMob – has been controlled by domestic conglomerate System Capital Management (SCM), which is 100% owned by Ukraine’s richest man Rinat Akhmetov. The SCM business empire is based in the heavily Russian-influenced region of eastern Ukraine, which includes the breakaway self-proclaimed Donetsk People’s Republic.

As reported by BizLiga, the head of the special commission Boris Filatov stated: ‘The Commission has decided to propose to the Cabinet of Ministers of Ukraine to consider at the meeting the issue of influence on the activity of PJSC Ukrtelecom, given the large debts to state banks. In case of need, in order to minimise the influence by the Russian Federation on the activity of PJSC Ukrtelecom as a strategic operator, to begin bankruptcy proceedings [at] the company, which will introduce an external management of the company to continue to return the controlling stake [to] the state.’ Filatov added that Ukrtelecom’s owner did not fulfill commitments regarding the required transfer to the state of a dedicated telecommunications network for special purposes, whilst pointing out that since the beginning of 2014 the telco has dismissed 15,000 employees. In addition, the Commission proposed an official investigation into the original privatisation of Ukrtelecom which was completed in Q1 2011.

Ukraine, Ukrtelecom (incl. TriMob)