SCM Group statement about developments in the non-government controlled areas in Donetsk and Luhansk oblasts (NGCA) (2.03.2017)
SCM Group has always been working only within the laws of Ukraine, including our businesses in the NGCA. No pressure can make us change the jurisdiction of our assets.
We provide jobs to hundreds of thousands of people across the country, from the west to the east, including in the NGCA. We supply heating, electricity and gas to millions of Ukrainian households.
SCM is one of few links between the government controlled areas and non-government controlled areas of Ukraine.
Despite the challenging political situation in the country and the ongoing hostilities, all SCM Group companies pay taxes and duties in full to the Ukrainian budget.
Since the conflict in Donbas broke out, SCM Group has paid over UAH 100 billion in taxes to the national budget, of which 10% are attributable to the businesses in the NGCA.
We believe that private property is sovereign, and the demands of re-registration of our companies and payment of taxes to self-proclaimed DNR and LNR are unacceptable.
SCM Group reports about losing control over its assets based in the non-government controlled areas of Donetsk and Luhansk oblasts (15.03.2017)
SCM Group reports that today, on 15 March 2017, it has lost control over its assets based in the non-government controlled areas of Donetsk and Luhansk oblasts (NGCAs), namely:
In the mining and steel sector (Metinvest): Yenakiieve Steel Plant (including its Makiivka-based arm, Makiivka Steel Plant), Yenakiieve Koksokhimprom, Khartsyzsk Pipe Plant, Komsomolske Flux, Krasnodonugol, Donetskkoks, and Metalen Ukrainian-Swiss joint company
In the energy sector (DTEK): DTEK Komsomolets Donbasu Mine, Mospinske CPP, DTEK Energovuhillia ENE, DTEK Skhidenergo (Zuivska TPP), DTEK Donetskoblenergo, Tekhrempostavka, DTEK Sverdlovanthracite, DTEK Rovenkianthracite, Electronaladka, DTEK Power Grid, and DTEK Service
In the real estate sector (ESTA): Pushkinsky Business Centre, Seventh Line Business Centre.
In the industrial and raw materials sector (UMG): Dokuchayevsk Flux and Dolomite Plant.
During these three years, our businesses based in the NGCAs have been operating exclusively within the laws of Ukraine despite all the challenges. They were a link between the government-controlled and non-government controlled areas of Ukraine.
As SCM Group has stated before, we believe that the requirement for re-registration of our companies and payment of taxes to the self-proclaimed DNR and LNR is absolutely unacceptable. Today, we have lost the opportunity to ensure operations of our assets in the NGCAs within the Ukrainian laws. We are forced to make a decision to suspend our activities in the NGCAs of Donetsk and Luhansk oblasts.
We are going to apply to the law enforcement agencies of Ukraine about the seizure of property of our production and non-production assets. SCM Group has notified the State Fiscal Service, tax authorities and state funds of the loss of our businesses.
We will do everything we can to restore the rule of law and resume operations of our businesses in the NGCAs. We are going to act within the legal framework and apply to Ukrainian and international courts.
At different times, starting from 2014, we reported about losing control over the following assets:
Heavy engineering (Corum Group): Corum Donetskgirmash, Corum Donetsk Power Equipment Plant, Corum Horlivka Heavy Engineering Plant
Real estate (ESTA): Donbass Palace Hotel, Park Inn Hotel
Telecommunications: Ukrtelecom and Vega.
Agriculture (HarvEast): a third of the land bank and more than a third of assets (the company suspended operations in the region in 2015 and has not resumed them ever since).
Football infrastructure: Donbass Arena stadium and Kirsha training facility.
Also, the Rinat Akhmetov Humanitarian Center “Aid+Help” had to suspend operations in the NGCAs.
First Ukrainian International Bank, Parallel filling station chain and Brusnichka supermarket chain stopped operations in the NGCAs in 2014 and 2015, respectively. Media Group Ukraine closed its offices in 2014.