Kyiv
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State concern Ukroboronprom launches international audit

Kyiv, November 02, 2017.

Ukroboronprom begins a global transformation, which includes international audit, clusterization, and corporatization of the state concern – departure from the form of the state unitary enterprise and the formation of a joint-stock company. Despite these changes, Ukroboronprom will remain 100% state-owned. “This process can be carried out through a tender to engage a leading international consultant or a consortium of consultants. We have started this process today by holding the first meeting of the Tender Committee, which has to choose an international consultant or a group of consultants,” said Denys Hurak, Deputy General Director for Foreign Economic Activity of Ukroboronprom, at a press briefing at Ukraine Crisis Media Center.

The tender for the international audit of Ukroboronprom will be available in the Prozorro system soon. “The main goal is a balanced choice between quality and price because we understand that we have to pay for these services by ourselves. Unfortunately, despite trying for year or two we could not find donor assistance,” said Denys Hurak. “We do not want to make this process formal – we want to make it as professional and efficient as possible. To do this, we have to work with the best providers of such services. “

Reforming the concern involves corporatization – a departure from the form of the state unitary enterprise and the formation of a joint-stock company. Volodymyr Kostrytskyi, Deputy General Director of the State Concern “Ukroboronprom,” noted that the state unitary enterprise is characterized by the high authoritarianism of decision-making, non-transparency, and complexity of conducting independent inspections. “Transformation to a joint-stock company makes the situation quite the opposite. There is a procedure for collective decision-making, and it is clearly structured. There are independent mechanisms for monitoring the activities of executive bodies of joint stock companies. There is a possibility of implementing public-private partnership projects with the participation of these joint-stock companies, as well as the possibility of investing – equity interest of other persons, primarily private capital,” – specified Mr. Kostrytskyi. He is convinced that corporatization is the only fast and effective way to attract foreign investment.

A year ago, Ukroboronprom began preliminary consultations on its reforming, and Transparency International also joined them. “After that, they developed the technical specifications for a comprehensive transformation, which includes due financial and legal diligence. It will result in restructuring the assets and forming a new kind of corporate structure of “Ukroboronprom,” Mr. Hurak specified.

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