Will Ivan Bastryha be forced to step down as Chairman of the Board at the Zaporizhzhia Aluminum Combine?

“While I am chairman of the board, the state-owned stake will not be sold without investment guarantees. Otherwise I’m quitting,” Zaporizhzhia Integrated Aluminum Works Ivan Bastryha top manager told The Day.

This no-compromise decision by the plant director was provoked by a scandal at the recent shareholders’ meeting. The latter sprang to their feet and rushed to the exit after Yevhen Kabanov, a member of the supervisory board and first deputy chairman of the oblast state administration proposed to amend the charter. (The board comprises five local officials, including Governor Volodymyr Kuratchenko, and only two plant representatives). The essence of the proposed innovation was literally “to include among the powers of the supervisory board the right to recall and appoint its chairman of the board.” The workers received the proposal with hostility. Everybody understood what the functionaries were driving at and what consequences it would have for the industrialists. The plant is under privatization. Within four months, a 68% stake is to be sold. The State Property Fund which owns a 93% share in the facility has already found a buyer. But this evidently does not satisfy the combine’s current management which has taken a firm stand on the issue of privatization, insisting that there should be an investment program. According to Ivan Bastryha’s calculations, the enterprise should get $350 million from privatization. The SPF plans to give up the stake for $100 million.

If adopted, the amendment to the charter would enable the supervisory board either to pacify Mr. Bastryha or replace him with a more pliable director.

Volodymyr Kuratchenko, who attended the meeting, did not conceal that as the SPF’s attorney he had received a clear government order as to how each item on the agenda should be voted. The attendants could see the instructions with their own eyes. Mr. Kuratchenko confessed to having received such orders in the past. After the governor’s words the shareholders made a second attempt to leave the hall. In order to prevent a breakup of the meeting, Mr. Kuratchenko had to agree to a compromise. After making an urgent call to Kyiv, he consented to postponing the ill-fated issue for four months, until the facility has been privatized.

When asked by journalists, to whom and by whom the state-owned share in the works will be sold, Ivan Bastryha said, half-abstractedly, half-hopelessly, “Our governments have changed often, and each tried to snatch away a piece of the aluminum pie. As big as possible at that. As a rule, they succeeded.”