19.03.2026
We continue to closely monitor the situation surrounding corporate governance at JSC “Ukrainian Distribution Networks” (UDN) and the state-owned oblenergos under its control. Recently, Energy Club sent two official letters to the First Deputy Prime Minister and Minister of Energy, Denys Shmyhal, calling for action to prevent the rollback of the reform.
It is worth noting separately his statesmanlike approach. We hope that it was the reaction of the relevant minister to our appeals that helped stop the managerial chaos and the attempt to form “manual” supervisory boards consisting of full-time employees of the management company itself.
Following our public inquiry, minutes of the extraordinary shareholders’ meetings held back on February 27 finally began to appear on the oblenergos’ websites. It should be noted that the publication of these documents occurred in gross violation of all legal deadlines. Currently, documents have been released by Khmelnytskyoblenergo, Ternopiloblenergo, Zaporizhzhiaoblenergo, and Mykolaivoblenergo. Kharkivoblenergo has still not published its minutes. Furthermore, another meeting is scheduled to take place in Cherkasy on the 20th.
A study of the documents already available explains a lot. The picture is absolutely identical everywhere. The main reason for convening the meetings was the termination of the powers of the current supervisory boards. However, during the vote on this very first issue, the initiator of the meetings—represented by the majority shareholder, UDN—voted against its own decision with its block of shares. No managerial decision was made. The supervisory boards remain unchanged; the result everywhere is zero.
But the meetings did not pass without a trace. In each of the published minutes, there is a single item that UDN representatives consistently support with 100% of their votes. This is the decision to oblige the oblenergos to compensate the management company for the costs of organizing and conducting these very meetings. As a result, we have a very strange precedent. The majority shareholder convenes a meeting, blocks its own key initiatives, but shifts all administrative expenses onto the enterprises themselves. In total, we are talking about an amount of around 700-800 thousand hryvnias, which will fall entirely on the shoulders of the state-owned oblenergos.
To help you understand the scale of this figure, it is the approximate monthly electricity bill for 500-600 households. In other words, funds paid over a month by a sizeable settlement were spent simply so that UDN managers could “practice” holding meetings without any real result. This is by no means a small figure, and someone must be held accountable for such managerial experiments.
In real business, the initiator bears financial responsibility for ineffective steps. Using oblenergo budgets to cover the costs of meetings with zero results directly contradicts the principles of effective state asset management.
By the way, this money is being drained from the working capital of distribution system operators at the most critical moment. Right now, companies desperately need every kopeck to purchase transformers and basic materials. These resources are vital for promptly restoring damaged networks after shelling, ensuring a reliable power supply to consumers, and preparing infrastructure for another difficult winter. But instead of real reinforcement of energy security, funds are being spent on paying for empty corporate procedures.
In this regard, I am preparing a new official appeal to the First Deputy Prime Minister and Minister of Energy, Denys Shmyhal. In it, I will ask for a proper assessment of this situation and for an investigation into the legality of such actions. Corporate governance must be built on legality and financial discipline, not on covering the consequences of unprofessional actions at the expense of critical infrastructure.
