DTEK Statement regarding Notice of Suspicion to DTEK Employees

DTEK Statement regarding Notice of Suspicion to DTEK Employees

DTEK08 August 2019

DTEK received a letter from the National Anti-Corruption Bureau (NABU) with a written notice of suspicion of the company's employees. DTEK believes that there is no valid reason for such investigative actions and that there is no legitimate basis for the suspicions set out in the investigation. DTEK is fully cooperating with NABU’s investigation.

The investigating authorities are concerned about the transparent operating rules in the wholesale electricity market which did not previously exist, and decisions governed by the operating rules which were previously made by the state bodies in a subjective way.

The reasoning behind using the principle of import parity and aligning Ukraine’s pricing methodology for coal with EU practices was approved by numerous international experts.  This should be taken into account. In particular, experts approved the connection of prices for coal in Ukraine with European indexes (including logistics expenses etc.) as being in line with the principle of import parity. Research demonstrated the absence of excess profits in the coal sector and Ukrainian thermal generation more generally.

The application of the import parity principle in price setting for energy products is a requirement of IMF and other international creditors of Ukraine. In comparison to price strikes in the natural gas market, electricity tariffs for Ukraine’s population still remain the lowest in Europe.   

DTEK operates within the legislative framework of Ukraine and adheres to international standards for ethics and compliance. The company is the largest investor, taxpayer and employer in Ukraine. In 2018, DTEK's capital investments amounted to UAH 20 billion, and tax contributions amounted to UAH 26 billion. In the coal industry alone, the company has invested $3.5 billion over its lifetime, increasing coal production by more than 2 times and helping use Ukrainian coal in electricity generation and avoid blackouts.

DTEK employees are providing NABU with all the necessary documents and answering all relevant questions. They are ready to help detectives understand the complex processes involved, the relevance of the international expertise used when putting the processes in place, and the relationship between Ukraine’s energy sector activities and current world practices.

When interacting with government agencies, DTEK's employees have always adhered to the rules of business ethics. The company has been active in implementing the electricity market reform in order to establish equal and transparent working rules for all participants. We consider the investigative body’s accusation that DTEK employees have misbehaved in their interaction with state authorities unjustified and baseless. The company will take all legal measures necessary to protect the honor and dignity of DTEK's employees.

DTEK calls for a thorough and independent investigation to confirm that the pricing methodology for energy coal is both legal and in line with international best practice. 

Reference

DTEK is a strategic holding company that develops business in the energy sector. DTEK’s companies employ 73 thousand people. Maxim Timchenko is the Chief Executive Officer of DTEK.
DTEK companies produce coal and natural gas, generate electric power at the fossil-fuel fired power plants and renewable energy power plants, supply thermal and electric power to end consumers, and provide energy services. The operating companies directly manage production companies in each of the business streams.
DTEK’s production indicators for 2017: the company has produced 27.7 mn tonnes of coal, 1.655 bcm of natural gas, generated (supplied) 37.1 bn kWh of electric power, of which 637.8 mn kWh have been provided by the renewable energy sources; and transmitted 43.2 bn kWh of electric power via the grid.
DTEK is a part of the financial and industrial group System Capital Management (SCM). The shareholder of the group is Rinat Akhmetov.
For more information, visit: https://dtek.com/en/
To learn about social partnership projects being implemented in the cities of DTEK activity, and to get a detailed report on the status of their implementation, please visit https://dtek.com/en/sustainable_development/

Corporate Communications Department
DTEK
Tel.: +38 (044) 581 45 35
+38 (044) 581 45 70
E-mail: pr@dtek.com
www.dtek.com