IMF Pushes Kyiv on Transparency After Ukrenergo Chief Ouster

(Bloomberg) -- Ukraine’s prime minister said the International Monetary Fund had urged the government to adhere to corporate standards after this month’s dismissal of the power grid chief sparked complaints by donors.

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Just over a week after Ukrenergo Chief Executive Officer Volodymyr Kudrytskyi was removed from his post by the power grid’s board, Premier Denys Shmyhal said IMF negotiators urged Kyiv to appoint a CEO and supervisory board in line with corporate reform obligations.

“These principles will obviously be written into parameters of our relations with partners,” Shmyhal told reporters in Kyiv Tuesday. IMF officials are in Kyiv to negotiate the next installment of a $15.6 billion loan program, a process that the prime minister called “difficult.”

Kudrytskyi, who had worked closely with Ukraine’s Western donors in efforts to shore up a power system decimated by Russian attacks, was ousted from the top job Sept. 2 by the supervisory board. The move prompted the resignation of two independent board members who called the move politically motivated.

The presidency of the Group of Seven nations issued a statement Monday referencing the departures and calling for “quickly organizing an OECD-standard process” to fill the vacancies on the Ukrenergo supervisory board with “competent, professional and independent experts.”

Shmyhal’s comments come as talks wrap up in Kyiv with the IMF, which last year lifted restrictions against channeling funds to nations at war, to move forward with funding. But tension has emerged on a range of issues, including concerns that the pace of hryvnia depreciation and tight monetary policy are putting a strain on Kyiv’s ability to raise budget revenue, according to officials familiar with the talks.

“This is hard work, not an easy mission,” Shmyhal said of the talks, citing “many challenges.”

--With assistance from Kateryna Chursina.

(Adds G-7 comment in fifth paragraph.)

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