Energy Club: "Deliberate destruction of corporate reform is taking place in the energy sector"

16.03.2026

Andrii Kostrytsia, President of the Energy Club business community, sent an official letter to the First Vice Prime Minister – Minister of Energy of Ukraine, Denys Shmyhal. The reason for the urgent appeal was the deliberate destruction of corporate governance reform in state-owned distribution system operators (DSOs), currently being carried out by the majority shareholder – JSC “Ukrainian Digital Grids” (UDG).

The letter states that the situation regarding the management of state energy assets is rapidly deteriorating. Energy Club has recorded a series of direct legal violations by officials of JSC “UDG,” which threaten the transparency of the energy market.

Key facts of violations outlined in the appeal:

• Withholding information from the market. The results of the extraordinary general meetings of DSO shareholders, which took place on February 27, 2026, have not yet been made public. Contrary to NSSMC (National Securities and Stock Market Commission) requirements, all legislative deadlines for the publication of minutes (including the maximum 10-day period) have expired.
• Destruction of the institution of independent directors. For March 20, 2026, JSC “UDG” has scheduled a shareholders’ meeting of JSC “Cherkasyoblenergo.” According to the published ballots, all 7 candidates for the Supervisory Board are exclusively representatives of the majority shareholder.
• Direct violation of the Law. The absence of any independent candidate violates Articles 72 and 76 of the Law of Ukraine “On Joint Stock Companies.” The law requires that in companies where the state owns more than 50%, specialized committees must be established, the majority of which must consist of independent directors (who must also chair them).

As Andrii Kostrytsia noted, the systemic dismantling of corporate reform began with the illegal termination of the powers of independent members of the Supervisory Board of JSC “UDG” itself, and now this practice is being scaled to all state-owned regional power companies (oblenergos).

“Against the backdrop of corruption scandals in the energy sector, such actions look like outright sabotage. Our European partners and donors pay maximum attention to the transparency of state enterprise management. The deliberate rejection of the institution of independent members completely nullifies the role of supervisory boards and directly contradicts the official position of the Government of Ukraine,” emphasized the President of Energy Club.

To prevent a legal collapse, Energy Club called on Denys Shmyhal to urgently intervene in the situation and:

1. Issue instructions to suspend/cancel the decisions of illegal extraordinary shareholders’ meetings at DSOs (specifically the meeting of JSC “Cherkasyoblenergo” scheduled for March 20).
2. Ensure an open and transparent competitive selection process for members of DSO supervisory boards, with unconditional compliance with the quota for independent directors.
3. Ensure conditions for the transparent formation of executive bodies of oblenergos in accordance with the Government’s policy on state property management.

Monitoring compliance with the law in this matter is critical to maintaining the trust of investors and international partners in the Ukrainian energy sector. Energy Club continues to monitor the Government’s reaction and the development of events.