In this difficult time for Ukraine, we appeal to you and deem it necessary to relay the following information.
On 12 May 2016, Kernel’s headquarters in Kyiv was searched by representatives of the Security Service of Ukraine. 350 employees of our company were locked in the building from 13.00 to 19.00. Without assessing the format of the search, we want to note that all 15 company documents seized by the Security Service of Ukraine could have been handed over willingly within 10 minutes as Kernel repeatedly offered to the representatives of the Security Service of Ukraine. Transparency and openness are Kernel’s core values in dealing with our stakeholders, including state bodies of Ukraine. We believe that the representatives of the Security Service could have spent those six hours more efficiently, given the high level of corruption in Ukraine and ongoing terrorist threat.
At the moment, Kernel’s headquarters and all other divisions are operating as usual.
We would like to note that it is not law enforcement agencies that are forming the economic future of Ukraine. Rather, it is responsible companies that invest in the development of the national economy, build modern factories, and introduce the most advanced technology. Kernel, the largest producer and exporter of agricultural products from Ukraine to the world markets, employs more than 14 thousand Ukrainians. Our tax payments to Ukraine’s state budget exceeded one billon Ukrainian hryvnyas in 2015. Over the past five years, we invested in excess of 18 billion hryvnyas into the country’s agricultural industry.
For the last 9 years, Kernel shares have been traded on the Warsaw Stock Exchange, with Kernel’s IPO have been recognized as the best in Eastern Europe. Our shareholders include the largest pension and investment funds in Europe and the United States, while the world’s largest banks are among our partners. Over the years, we have led East European and national ratings for business transparency and corporate governance quality.
We are confident in our legal position and will prove it in the courts. In our opinion, the case used to conduct the search was initiated based on distorted facts and has no prospects. We have repeatedly proved our position in courts, regardless of changes in political power and rotations in law enforcement agencies. This situation will be no exception.
We do not require verification of the legality of Security Service of Ukraine’s representatives’ actions with regards to Kernel, punishment of the guilty or public assessments. We just think it is important to draw your attention to the following:
– Such actions by the Security Service of Ukraine negate the multiple efforts by the country’s senior management to attract foreign capital to Ukraine.
– Kernel serves as an international marker of Ukraine’s agriculture sector investment attractiveness and Ukraine’s overall reputational reliability.
– This situation clearly sends a negative and threatening signal to current and potential international investors.
– Without changing the style and philosophy of law enforcement agencies’ approach to the business community, any statements on the improvement of the investment climate will be empty declarations.
From our side, we will do everything to ensure this situation has no negative consequences for our shareholders and employees.
We are ready to contribute as much as possible to any of your efforts to establish a transparent, responsible, and mutually beneficial relationship between business and government. As a public company, we are always ready to support you in this matter and to work toward strengthening the international economic reputation of Ukraine.
Yours faithfully,
Board of Directors
Kernel
