United Energy Systems of Ukraine
|Industry||Oil and gas|
|Founded||1991 as Ukrainian Petrol Company|
|Headquarters||Kyiv and Dniepropetrovsk, Ukraine|
|Key people||Yulia Tymoshenko (President of the Corporation since November 1995 to January 1997)
Oleksandr Tymoshenko (President corporations from January 1997)
Hennady Tymoshenko (died in May 2012)
Alexander Gravets (vice president, co-owner UESU)
|Revenue||$4 billion (1996)|
United Energy Systems of Ukraine, abbreviated to UESU (Ukrainian: Єдині енергетичні системи України, ЄЕСУ), was a natural gas trading company in Ukraine. In the years 1995 and 1996, it was the largest natural gas importer in Ukraine. The company has been affected by a series of scandals.
The predecessor of the United Energy Systems of Ukraine (UESU) was established in 1989 by Yulia Tymoshenko as a family cooperative in Dnipropetrovsk. In 1991, it was set up by Yulia Tymoshenko, her husband Olexandr Tymoshenko, and Olexandr Gravetsas as the Ukrainian Petrol Company, which sold gasoline to farmers in Dnipropetrovsk Oblast.
In 1995, the company was reorganized into the United Energy Systems of Ukraine. Pavlo Lazarenko partly owned the company. After his appointment in September 1995 as First Vice Prime Minister of Ukraine, Lazarenko allocated gas quota to private companies. He gave priority to Itera and UESU.
In 1997, the company became head of a consortium that was responsible for Russian natural-gas supplies to Ukraine. In 1996 and 1997, UESU was the biggest gas trading company in Ukraine and it had branched out to other industries. Early in 1997, it controlled several banks, had stakes in metallurgy and machine building companies and in two airports and participated in Bulgarian and Turkish pipelines and controlled several local and national newspapers. It controlled 80% of Ukraine's natural gas supply and accounted for an estimated eights of Ukraine's GDP.
After Yulia Tymoshenko's election into the parliament of Ukraine in December 1996, she resigned as president of UESU and this post was given to her father-in-law Hennady Tymoshenko. In July 1997, Lazarenko was forced to resign as Prime Minister. After that UESU came under scrutiny of government officials which lead to several charges of dumping in September 1997. At the end of 1997, UESU was ousted from the natural gas market of Ukraine. In 1999 a new national energy company Naftohaz Ukrainy was given a monopoly on natural gas deliveries to state organisations and households – an estimated 85 per cent of the market.
Yulia Tymoshenko's ties to Lazarenko, who was arrested in 1999 and convicted in the U.S. on charges of corruption and money laundering, prompted a series of investigations, which in turn led to a series of scandals from 2000 to 2004.
The company was dissolved in 2009.
Olexandr Tymoshenko's arrest
The Ukrainian police arrested Olexandr Tymoshenko in August 2000, together with Valery Falkovych, first deputy general director of the corporation. Tymoshenko was officially accused of embezzling US$800,000 in public funds through the export of rolled metal to Asia during the 1990s. On 9 August 2001, pursuant to the decision of the Kiev Sviatoshynsky District Court of the Kyiv region, Tymoshenko and Falkovich were released from custody and all charges against them were dropped. This decision was supported by the Court of Appeal of Kyiv region and the Supreme Court of Ukraine.
On 30 April 2002, the Kiev Svyatoshinsky local court of the Kyiv region dismissed all criminal charges against Oleksandr Tymoshenko and admitted that actions of the Prosecutor General of Ukraine were illegal.
Yulia Tymoshenko's arrest
Yulia Tymoshenko was arrested on 13 February 2001 (released 27 March 2001). She stayed under arrest for several weeks on forgery and gas smuggling charges. Kiev's Appeal Court cancelled lodging of criminal proceedings against her and her husband in May 2004. In December 2005, the Russian Prosecutor General's Office closed all the criminal cases against Tymoshenko.
Resumption of criminal investigation
In July 2011, the Ukrainian security service opened a criminal investigation into the embezzlement of $405 million by UESU in 1997. Kyivsky District Court of Kharkiv closed the criminal case on 28 February 2014.
Kyiv District Court of Kharkiv has closed a criminal case on charges against former Ukrainian Prime Minister Yulia Tymoshenko in the case on financial abuse of the United Energy Systems of Ukraine (UESU) Corporation.
"The court has ruled that criminal proceedings on charges against Yulia Volodymyrivna Tymoshenko regarding crimes committed under Part 3, Article 27, Part 5, Article 191, Part 2, Article 15, Part 3, Article 212, and Part 2, Article 366 of the criminal Code have been closed close due to the prosecutor's dropping of the charges," reads a ruling, which was read out by Judge Kostiantyn Sadovsky on Friday.
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