Moratoriums create unequal conditions in the energy market – chairman of the UNBA Committee

State-owned and private energy companies must operate under the same rules, particularly with regard to debt collection and bankruptcy. Existing legislative restrictions place energy market participants in different legal situations.

Chairman of the UNBA Committee on energy law Oleksandr Trokhymets spoke about this during a broadcast of «EnergoBlok» on «EnergoBusiness» magazine, which focused on the management of state-owned energy companies.

According to him, the legal framework governing a company’s operations should not depend on the state’s shareholding in the company. State-owned and private companies should be equal market participants and compete on equal terms.

As an example of existing inequality, the chairman of the UNBA Committee cited the legal prohibition on initiating enforcement proceedings to collect debts from certain state-owned energy enterprises. At the same time, no such restrictions apply to private enterprises.

According to O. Trokhymets, as long as state-owned enterprises operate under one legal framework and private ones under another, it is difficult to speak of fair competition or to objectively assess the effectiveness of corporate governance. The requirements for corporate governance must be the same for all companies, regardless of ownership structure.

Separately, the advocate explained that initiating bankruptcy proceedings does not necessarily mean the liquidation of a company. According to him, it gives creditors the opportunity to gain control over the debtor’s assets including its accounts receivable and thus ensure the actual repayment of the debt.

To level the playing field in the energy market, he proposed lifting the moratoriums on initiating enforcement proceedings and applying bankruptcy procedures, as well as establishing uniform corporate governance requirements for all joint-stock companies — both state-owned and private.

Under these conditions, all enterprises will operate within the same legal framework and compete for customers on an equal footing.