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. Last Updated: 07/27/2016

Kiev Official Fired Over Privatization Scandal

KIEV -- Ukrainian President Leonid Kuchma on Wednesday reprimanded Ukraine's privatization chief and fired another official in a controversy linked to the privatization of a regional energy company.

The case began last summer after the Verrona Plus company paid some 25.3 million hryvna (about $12.6 million at the time) to acquire a 35 percent stake in Luhanskoblenergo, which provides electricity to the coal-rich area of Luhansk.

The company pledged to invest 21 million hryvnas ($5.34 million) into Luhanskoblenergo by the end of 1998, but failed to do so, prompting the chief prosecutor's office to seek a court decision annulling the deal.

But the first deputy chief of the State Property Fund, Anatoliy Holubchenko, agreed to give Verrona Plus a one-year extension, officials in Luhansk told Kuchma, who was visiting the region Wednesday.

Kuchma immediately ordered Holubchenko fired and reprimanded Ukraine's privatization chief, Oleksandr Bondar, Interfax reported.

Kuchma also said the former Soviet republic was "mistaken" in allowing regional energy suppliers to be privatized.

"We gave away the button, but to whom?'' Kuchma asked.

Ukraine's energy market has been at the center of several scandals lately, with the media reporting that most of the privatized energy firms were sold cheaply to obscure companies that may have links to the government.

Kuchma ordered an investigation, and has fired three senior government officials after reading the findings.

The chief prosecutor's office also has asked courts to revoke privately owned stakes in six regional electricity suppliers out of the seven privatized last year.

Ukraine has 27 regional energy companies, considered among the country's most attractive properties since each holds a monopoly or near monopoly on electricity supplies in its region.

Energy privatization in Ukraine was suspended several times last year, with government officials feuding over how to sell energy companies. Foreign energy giants have shunned Ukraine's energy sector due to changing privatization rules.