DTEK says that it has lost control over its companies located in the temporarily uncontrolled territory of Donetsk and Luhansk regions

DTEK says that it has lost control over its companies located in the temporarily uncontrolled territory of Donetsk and Luhansk regions

Directors of the following DTEK's companies: DTEK Mine Komsomolets Donbasa Private Joint-Stock Company (PrJSC), Mospino Coal-Preparing Enterprise LLC, DTEK Energougol ENE PrJSC, DTEK Skhidenergo LLC (stand-alone subdivision Zuyivska Thermal Power Plant), Public Joint-Stock Company (PJSC) "DTEK Donetskoblenergo", Tehrempostavka LLC, DTEK Sverdlovanthracite LLC, DTEK Rovenkyanthracite LLC, Elektronaladka LLC, DTEK Power Grid LLC and DTEK Service LLC, which are located in the temporarily uncontrolled territories of Donetsk and Luhansk regions, have been notified about the necessity to re-register the companies in the so-called Donetsk People's Republic (DPR) and Luhansk People's Republic (LPR) and take the inventory of their property.

From this moment, DTEK does not control the operation of the above mentioned companies. DTEK considers the demand to re-register its companies unacceptable and any form of pressure won’t force DTEK to change the jurisdiction of its assets. 

"This recent development has been caused by the political conflict in Donbas region as a result of which the Ukrainian citizens, Ukrainian businesses and the entire national economy has been taken and continues to be held hostage," says Maxim Timchenko, DTEK's Chief Executive Officer. "The companies in the non-controlled territory constitute an integral part of the unified Ukrainian economic infrastructure. The disruption of the production chain would make their further operation impossible as Donbas mines do not have any other market to sale their coal, and any activities not within the Ukrainian legal framework  would entail serious legal implications for all the buyers of the companies' products and their suppliers of equipment and materials. This virtually means the termination of the companies' activities, which would negatively affect the Ukrainians on the both sides of the contact line. Ultimately, this would dramatically decrease their income level and trigger the unemployment growth."   

Over the three years of the armed conflict, DTEK's companies have been operating in strict compliance with the Ukrainian legislation. In the last year alone, DTEK's companies operating in Donetsk and Luhansk regions and registered in Ukraine paid over UAH 2 billion in taxes to the Ukrainian national budget. Ukrainian TPPs operated without any interruptions, which enabled to balance the energy system. 36,000 employees regularly received their salaries and social benefits.

"We have been fighting for retaining these companies in Ukraine's economic infrastructure for three years, but cannot ensure their sustainable operations any more. DTEK will try to do everything in its power not to leave our employees in need and will offer to them to be transferred and find employment with our other companies. I hope that the international judicial system and the primacy of the rule of law will allow DTEK to regain its control.Then, we will be able to resume the full-fledged operations," says Maxim Timchenko.  

With regard to the loss of control over the above companies, DTEK has applied to the Ukrainian law enforcement bodies, the State Fiscal Service, tax bodies and governmental funds. To protect its interests under Ukrainian and international laws, DTEK has engaged legal firms.