Ukrainska Zaliznytsia's supervisory board may have minimum 25% independent representatives

The draft regulations of public joint-stock company Ukrainska Zaliznytsia foresees the involvement of independent representatives in the supervisory board selected at a tender to ensure that the decisions made the board are fair.

The State Railway Administration of Ukraine (Ukrzaliznytsia) told Interfax-Ukraine that the expected quota of independent members of the supervisory board should be no smaller than 25%, but no larger than 50% of the total number of board members.

According to regulations, an independent member of the supervisory board is a person who has no business, congener or other any other relationship with officials of the company, and who was not an official or an employee of the company, its subsidiaries, organizations, or other affiliated divisions.

The draft document sets the age restriction for individuals who are eligible to become members of the supervisory board at 65 years.

The same requirements are proposed for members of the audit commission of public JSC Ukrainska Zaliznytsia.

It is proposed that the two-signature rule is introduced, under which certain documents (agreements, power of attorneys and financial documents on behalf of the company) are only valid if they are signed jointly by the board chairman and any other board member.

Banning officials of the company's boards from founding any organization which competes with Ukrainska Zaliznytsia or could compete with it is also foreseen.

Ukrzaliznytsia said that the above-mentioned requirements require amendments to be made to some Ukrainian laws, first of all, the law on joint-stock companies, the law on the specifics of creating a railway transport public joint-stock company, and the law on managing state-owned facilities.

"One should say that these innovations are mainly aimed at bringing the operation of the public sector of the economy in line with the requirements of the EU," Ukrzaliznytsia said, adding that the corporate management practices drawn up by the Organization for Economic Co-operation and Development (OECD) were studied while the draft regulations were being drawn up.

As reported, referring to Infrastructure Minister Andriy Pyvovarsky, the Infrastructure Ministry of Ukraine announced that it expects that joint-stock company for railway transport Ukrainska Zaliznytsia would be created in September 2015. Deloitte continues to appraise the assets of Ukrzaliznytsia and may be finished by the middle of June.

Public JSC Ukrainska Zaliznytsia, 100% of the shares of which will be in state ownership without the right to sell them, will be created on the basis of Ukrzaliznytsia and over 50 railway enterprises which are to be reorganized through mergers.

The list of companies based on which Ukrainska Zaliznytsia will be created includes six railroads, wagon repair plants, railway state-owned enterprises, research and design institutes of railway transport, and a number of design and design-engineering bureaus.

The charter capital of the newly formed joint-stock company will be formed using the property of Ukrzaliznytsia, the above-mentioned companies, as well as 100% of the shares belonging to the state in the charter capital of seven plants - Dnipropetrovsk diesel locomotive repair plant, Zaporizhia electric locomotive repair plant, Lviv locomotive repair plant, Kyiv-based Sichnevoho Povstannia 1918 wagon repair plant, Kyiv electrical plant Transsignal, Korosten plant producing reinforced concrete railway sleepers, and Hnyvan special reinforced concrete plant.

State-owned stakes in the charter capitals of Moldromukrtrans LLC (Moldova, 33.33%), ETRANSA Speditions AG (Austria, 25.72%), Breitspur Planungsgesellschaft mbH (Austria, 25%), Ukrtransleasing leasing company (47.67%), Ukrzovnishtrans international transport company (25.1%) and Inter-Policy insurance company (8.16%).