KYIV (Reuters) -Members of the supervisory board of Ukraine's state-run energy firm Naftogaz said on Friday they decided to resign following the ouster of the company chief, which has raised concerns among the company's international partners.
The government on Wednesday unexpectedly replaced Andriy Kobolyev, who had run the company for seven years, with Yuriy Vitrenko, acting energy minister.
The sacking prompted Ukraine's Western backers to warn that integrity and transparency in such appointments were key to maintaining confidence in the country's commitment to reform.
The European Union, the European Bank for Reconstruction and Development, the European Investment Bank, the World Bank and the International Finance Corporation said in a joint statement on Friday they were "seriously concerned" about recent events at Naftogaz.
They said they were concerned in particular that the supervisory board was temporarily suspended in order to dismiss Kobolyev.
"We call upon the leadership of Ukraine to ensure that crucial management decisions at state-owned enterprises are taken in full accordance with the basic tenets of recognised corporate governance standards," they said.
The issue would be on the agenda when U.S. Secretary of State Antony Blinken meets President Volodymyr Zelenskiy and other officials during a visit to Ukraine on May 5-6, said Philip Reeker, U.S. acting Assistant Secretary of State for European and Eurasian Affairs.
"Any attempt to change governance and the selection procedures at government agencies is troubling," Reeker said on a call with reporters.
Although the suspension of the board was lifted right after the sacking, the board issued a statement on Friday saying that all its members were submitting notice of their resignations, effective May 14.
Supervisory board chair Clare Spottiswoode described the situation as the "total destruction of good corporate governance".
"The supervisory board will use the coming two weeks of its notice period to help the company as much as it can to deliver an orderly transition and will inform the shareholder in detail early next week," the statement said.
Vitrenko told reporters earlier on Friday the concerns of international partners were "understandable" and "a number of problems needed to be resolved."
"It is very important for Naftogaz that there is a full supervisory board, elected in a transparent way, so that society trusts this supervisory board," he said.
Vitrenko, a senior Naftogaz official in previous years, said the company needed to return to profit after it reported a loss of $684 million in 2020. It was because of that loss that former CEO Kobolyev was dismissed, the company said.
The company said this week the 2020 loss reflected lower demand, lower gas prices and provisions for bad debts.
Naftogaz combines gas and oil production facilities, and a gas storage business. It also supplies gas to consumers.
(Reporting by Pavel Polityuk and Natalia Zinets; additional reporting by Simon Lewis in Washington; Editing by Edmund Blair, Steve Orlofsky, Sonya Hepinstall and Diane Craft)