12 years for a bonus. How Koboliev ended up on the defendant's bench and why he returned to Ukraine

12 years for a bonus. How Koboliev ended up on the defendant's bench and why he returned to Ukraine

How the former head of Naftogaz ended up on the defendant’s bench and why NABU decided to return to the case about Koboliev’s bonus is examined by EP.

For the first time since the start of the war, former Naftogaz CEO Andriy Koboliev decided to return to Ukraine and immediately received a suspicion notice from the National Anti-Corruption Bureau and the Specialized Anti-Corruption Prosecutor’s Office for embezzling nearly 230 million UAH.

That amount is part of the bonus for the victory in the Stockholm arbitration against Russia’s Gazprom, which he allegedly awarded to himself while simultaneously misleading the supervisory board of the largest state company.

The accused himself considers the case political, but at the same time says he trusts independent anti-corruption bodies and believes he will be acquitted. 23 January the High Anti-Corruption Court already sided with him, refusing the prosecution’s request to arrest Koboliev.

What sentence could the former head of Naftogaz be facing — from 7 to 12 years in prison — and how does he plan to defend himself?

The Stockholm bonus

The case in which former Naftogaz head Andriy Koboliev was accused of embezzling 229 million UAH concerns the payment of bonuses for the victory in the Stockholm arbitration against Gazprom in 2018.

At that time the Ukrainian company won 4,6 billion USD from the Russian gas monopolist under the transit contract. In the same year the supervisory board of state-owned Naftogaz decided to pay bonuses to Naftogaz’s management.

It was assumed that the reward would amount to 1% of the award, i.e. 46 million USD or about 1,27 billion UAH. Later Koboliev will say that he received only the first part of the payments and that the rest was allegedly frozen due to political pressure.

At the same time, there are no questions about the first tranche: of the total 21 million USD, the then Naftogaz CEO was paid 261 million UAH, which at the then exchange rate exceeded 10 million USD.

In the same 2018 year, following a statement by MP from OPZH Vasyl Nimchenko, the National Anti-Corruption Bureau (NABU) opened a criminal proceeding, but Koboliev received a suspicion in this case only on 19 January 2023.

What is he accused of?

How Koboliev awarded himself a bonus

According to NABU detectives, Andriy Koboliev issued an illegal order to award bonuses to employees, on the basis of which he himself received 261 million UAH.

This sum allegedly exceeded the regulatory limits for such payments of 37,48 million UAH. Thus, investigators believe Koboliev was overpaid by almost 230 million UAH in violation of the law.

NABU detectives point out that the key problem was violation of a Cabinet of Ministers resolution that limits the amount of an annual bonus for a company’s head to 24 salaries. No more. The amount of 261 million UAH grossly and disproportionately exceeded the permissible level of remuneration.

Koboliev’s lawyers are confident he did not violate that resolution, because the document in that edition contained a clause allowing payment of remuneration from the company’s net profit if the supervisory board of the state company makes such a decision.

The defense of the former Naftogaz head notes that the accusation that he wrote out the bonus to himself is also not true.

Koboliev refused to give EP any comments on the case “so as not to harm the investigation and himself.”

The supervisory board on Koboliev’s side

“In fact, the decision was made by the Naftogaz supervisory board. Koboliev, as the CEO, only submitted a request to the supervisory board to consider the issue of awarding bonuses, but could not make the decision on his own.”

“The supervisory board had independent legal advisers, enough time and competence to make a balanced decision that complies with global practices,” the accused’s lawyers emphasize.

After the suspicion was handed to Koboliev, former members of the Naftogaz supervisory board Claire Spottiswoode, Bruno Lescouat and Ludo Van der Heyden stepped in and refuted the claim that the former CEO misled them.

In their statement they stressed that the bonus was issued in accordance with global corporate governance practices.

Naftogaz: how reformers are dismissed because of reforms

“These bonuses were approved unanimously by the full composition of the board, including both independent members and members appointed by the Government of Ukraine who represent its interests,” their statement says.

As a result, the prosecution and defense were able to present their arguments when choosing the preventive measure of detention for Koboliev. The case was heard by the High Anti-Corruption Court (HACC) on 19 and 23 January.

A prosecutor from the Specialized Anti-Corruption Prosecutor’s Office (SAPO) asked to arrest Koboliev or set bail at 365 million UAH, but the HACC sided with the accused and released him to go home.

SAPO has already announced it plans to appeal this decision, arguing that Koboliev, who is at liberty, may interfere with the investigation or even leave the country.

Why Koboliev returned to Ukraine

During the court hearing it became known that since at least February 2022 Koboliev had been abroad and returned to Ukraine only in January 2023. A few days later he received a suspicion notice from NABU and SAPO. Why did he decide to return?

Koboliev himself claims he knew about the case and allegedly came back to avoid speculation and to defend himself in court.

“Understanding that a suspicion was being prepared, I immediately returned to Ukraine so as not to give grounds for accusations that I ran away or am hiding,” he wrote on his Facebook page.

However, his return, unexpected for many, spawned a number of conspiracy theories. They say he was lured back on purpose in order to send him to prison. One of these theories is that the Office of the President (OP) is behind it.

According to EP, after arriving in Ukraine Koboliev did have meetings with representatives of the Office of the President and, as one interlocutor close to the OP notes, the possibility of his involvement in the team of Vice Prime Minister for Ukraine’s recovery Oleksandr Kubrakov was discussed.

How Koboliev ended up on the defendant’s bench

In this process the former head of Naftogaz was seen as responsible for the energy direction. In what form this could or did materialize is hard to say. However, after receiving the suspicion and the start of the court process, it makes little sense to speak about it definitively.

What role and interest might Office of the President staff have had in issuing the suspicion? Koboliev’s supporters suggest that the deputy head of the Office of the President, who did not participate in the meetings and could have acted for personal motives, may be involved in the case.

They specifically refer to the law-and-order sector overseer Oleh Tatarov, whose purported objective in this process could be to discredit two reforms that society regards as successful.

The argument goes that if Koboliev’s guilt is proven and he is imprisoned, it will mean the failure of corporate reform. It would confirm that supervisory boards in state companies are ineffective because “hundreds of millions of hryvnias were stolen right under their noses.”

If Koboliev wins, it would indicate the failure of the anti-corruption reform and the incompetence of NABU and SAPO. “It’s a win-win situation in either case,” a source close to the former Naftogaz head tells EP.

In support of this version he cites the fact that the suspicion against the former Naftogaz executive was signed not by SAPO head Oleksandr Klymenko personally but by deputy Andriy Syniuk, who is connected to Tatarov.

This version is publicly advanced by Koboliev’s supporters and his defenders. However, reality may be much simpler.

After his appointment Klymenko revived a large number of high-profile cases that had not moved under his predecessor. This concerns investigations like the ‘Rotterdam+’ formula, the case of the now-former NBU head Kyrylo Shevchenko and others. Following this principle, NABU decided to return to Koboliev’s case as well.

Interestingly, Koboliev’s side believes in the impartiality of the HACC, NABU and SAPO and plans to prove its case in court.

There is another possible development that would be ideal for Koboliev. Purely theoretically, the head of SAPO could initiate closing the case if he delves into its substance and concludes that there is insufficient evidence of guilt.

However, judging by the prosecution’s intention to appeal the HACC decision on Koboliev’s preventive measure and to seek his arrest, such a scenario seems unlikely — at least for now.

Mykola Topalov, translated by Skelet.Info