Over Half of State Enterprises Under the Property Fund Exist Only on Paper

The State Property Fund's Current Situation

According to Главком: Dmytro Natalukha, head of the State Property Fund of Ukraine, has revealed that more than 50% of the state-owned enterprises under the Fund’s management are effectively shell companies. He attributes this to a lack of effective leadership at the Fund over the past year and a half. The Fund is now preparing assets for privatization and has announced a wave of management changes at state enterprises.

Appointed as the Fund’s chairman in January, Natalukha noted that the Fund oversees over two thousand state enterprises, but the majority are merely 'shells.' According to him, these entities 'exist only on paper: they have a name, a tax ID code, and nothing else.'

Challenges and Reform Prospects

Natalukha stressed that the absence of fully functional leadership at the Fund over the last 18 months has severely hampered the institution’s governance and its credibility with both domestic authorities and international partners. He singled out two particularly problematic enterprises:

• Odesa Portside Plant
• Sumykhimprom

He also pointed out that many strategic enterprises are saddled with inflated debts that appear to be fictitious.

'It was clear things were bad at the Fund, but I never imagined they were this bad.' – Dmytro Natalukha

Natalukha confirmed that the Fund has already completed an audit, identified all major issues, and is now working on solutions while preparing individual assets for sale.

The State Property Fund has announced a wave of leadership changes at state enterprises as part of broader reform and optimization efforts.

The current state of the Fund highlights the urgent need to overhaul management structures and accelerate privatization processes. Persistent debt issues and a leadership vacuum point to systemic flaws in how state assets are managed-flaws that could undermine the country’s economic stability. Replacing enterprise directors may be the first step toward better governance and attracting investment.

The ongoing challenges faced by the State Property Fund are further underscored by the recent revelation that a significant portion of its assets are classified as non-liquid. This situation not only complicates the path to effective privatization but also highlights the urgent need for comprehensive reforms within the Fund to address systemic inefficiencies and restore credibility.