A listed British company, Regal Petroleum plc (part of Smart Energy Group) has informed its shareholders, overseas partners and other stakeholders about searches made by Ukrainian tax authorities at its representative offices in Ukraine. The Company believes that such actions are pointless and cause harm to the general investment climate in Ukraine. This is written in Regal Petroleum’s official statement published on the website of the London Stock Exchange on 16 November 2017.

The Company reported that on 10 November 2017 officials of the tax police came to Regal Petroleum’s office in Kiev, to its operational office and to the warehouse in Poltava region to make searches. As a result, representatives of tax authorities seized some documents. In addition, part of the equipment in stock, which is a pool of spare parts and mechanisms for field operations and is needed for future projects of deposit development, was also seized. Moreover, the tax authorities suspended registration of VAT invoices of one of Regal Petroleum’s daughter companies, which affects its work and creates additional accounting administering, including for the company’s contractors.

Having scrutinized the documentation provided by the tax authorities as a reason for their actions, the Company admits that considers it absolutely unsupported by evidence and unsubstantiated. Furthermore, the searches were made in violation of the Ukrainian law.

The report also says that Regal Petroleum plc requested its Ukrainian lawyers to take all the necessary measures to protect its rights and to challenge the tax authorities’ actions in Ukrainian courts.

Currently, the Company is operating in its regular mode.

Let us recall that on 10 November 2017 representatives of the tax police, on the initiative of the Prosecutor General’s Office of Ukraine, searched the gas producing companies of Smart Energy Group, its head office and homes of its senior executives. Investigative activities were carried out in Kharkov and Kiev, as well as in Poltava region as part of the investigation into an alleged fictitiousness of the group’s management company, Smart Energy LLC, and the resulting alleged tax evasion by the group’s enterprises.

In addition, Smart Energy Group stated that pressure on the companies of the Group was of a systemic nature. The Company came out with an initiative to create a register of corrupt law enforcement officers, which would contain information about particular executors who carry out culpable orders, falsify evidence and conduct investigative activities in violation of procedural regulations in order to unlawfully exert pressure on business. The Group expects that this initiative will be supported by investigative journalists and companies that are also fighting this outrage from law enforcement officials.

Reference

Smart Energy is a part of Smart-Holding in charge of implementing exploration projects, commercial development of the hydrocarbon deposits and alternative energy initiatives.

Oil & Gas business block of Smart Energy is represented by gas producing Ukrgazvydobutok (Kharkov region) and Regal Petroleum plc, a listed British company having assets in Poltava and Kharkov regions (Prom-Energo Product).