Privatization of Ocean Plaza at Risk Following Raids on Ukraine's State Property Fund
Concerns Over the Sale of Ocean Plaza Mall
According to Главком: Dmytro Natalukha, head of Ukraine's State Property Fund (SPFU), has warned that law enforcement actions could derail the privatization of the Ocean Plaza shopping center. On June 18, the Prosecutor General's Office conducted searches at the homes of SPFU officials as part of a criminal investigation into alleged abuses during preparations for the sale of this retail and entertainment complex.
Natalukha emphasized that the SPFU does not appraise Ocean Plaza, set its value, or sell it to predetermined buyers. Instead, independent certified valuers handle the assessment, while the SPFU proposes a starting price for cabinet approval. The sale is scheduled to take place via an online auction on the Prozorro system. In 2024, the government aims to raise around UAH 13 billion from privatization, with Ocean Plaza being a key asset in this effort.
Nationalization Background and Privatization Risks
In March 2023, the High Anti-Corruption Court (HACC) confiscated Ocean Plaza from Russian oligarchs Arkady and Igor Rotenberg. The state gained 100% of the charter capital of Avanhard-Vilarti LLC and 66.65% of the Investment Union Lybid LLC. The HACC Appeals Chamber upheld the nationalization of Ocean Plaza's debts, and Ukraine has placed the Rotenbergs on a wanted list.
Natalukha stressed that the situation surrounding Ocean Plaza could discredit and disrupt the entire privatization process in Ukraine.
“As of today, not only is there no specific price for the mall lot-there's no date, and most importantly, no method of sale has been determined,” he said.
“So what do we end up with?And we also end up with the discrediting and collapse of the entire privatization process in the country.”
- The Fund does not appraise the mall.
- It does not set its value.
- It cannot sell it to a predetermined person.
To ensure transparency, Natalukha is proposing the creation of a public council that would include representatives from the media, law enforcement, and civil society organizations. “Today, I instructed my staff to explore setting up something like a public or civic council, which would include media representatives, law enforcement, and NGOs. We would then show documents for all assets, as permitted by law,” he stated.
Natalukha also expressed willingness to disclose the financial statements of Ocean Plaza and other assets, provided it does not violate legal restrictions. “If we can, for example, show Ocean Plaza's financial plan and there are no legal barriers, then we should do it,” he added. Through these steps, the SPFU aims to foster openness and accountability in the privatization process despite ongoing challenges.
The Ocean Plaza privatization case highlights broader issues in Ukraine's privatization landscape, which faces legal and administrative hurdles. Risks tied to criminal investigations could significantly complicate efforts to attract investors and meet the government's budget revenue targets. Establishing a public council may help improve transparency and trust in Ukraine's privatization process, but its success will depend on state agencies' willingness to collaborate with the public and media.
As the situation unfolds, the implications of the recent law enforcement actions are becoming clearer. The ongoing investigations could significantly impact the privatization efforts, leading to further uncertainty surrounding the sale of Ocean Plaza. For a deeper understanding of the circumstances, including the police raids and their potential consequences, read more about the allegations of manipulation in the Ocean Plaza sale.
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