On Holy Thursday, the Board of Directors of the «Hellenic Petroleum S.A.»in order to decide on amendments to a number of articles of the Articles of Association, which it will propose to the General Meeting, to be convened on an extraordinary basis on May 20.".
The most significant change concerns the composition of the Board of Directors itself: the General Meeting is called upon to approve the election of all members of the Board of Directors by the General Meeting and the repeal of the agreement between the Greek State and the shareholders, which has been in effect since 2003 and has been observed to this day, under which 7 of the 13 total members of the Board are appointed by the Greek State, 2 are appointed by the company «Paneuropean Oil and Industrial Holdings S.A.» (affiliated with the Latsis family), 2 are elected by universal suffrage by the employees, and 2 members are elected by the General Meeting of minority shareholders.
In addition, the Hellenic Petroleum Group has now announced its intention to establish a holding company, which will serve as a corporate «umbrella» for the subsidiaries (HELPE, EKO, ASPROFOS, etc.), In fact, it is rumored that the parent company's headquarters will be located outside Greece (most likely in Switzerland).
We have learned from the management of Hellenic Petroleum that The Group’s transformation is essential for adapting to the new global environment by redefining its ESG (Environmental, Social, and Governance) and its emissions reduction targets, as well as the establishment of an appropriate corporate structure, while the amendment to the Articles of Incorporation regarding the composition of the Board of Directors is intended to ensure compliance with the new law on corporate governance (Law 4706/2020).
The government, on the other hand, seems to be keeping a tight lid on the matter—a silence that could even be considered suspicious, given that this is one of the Greek government’s most important assets. To what extent, however, can the vote the vote of the government representatives on the board of directors—who, at least for now, hold the majority—regarding the decision made on April 26?;
First of all, let’s see what this decision by the Board of Directors means for Hellenic Petroleum—and beyond. In simple terms, without getting bogged down in legal and technical jargon, it means that The Greek government is directly and voluntarily transferring management of the Group, which it has held since 2003, when the Simitis government began the privatization of Hellenic Petroleum.
This is, without exaggeration, the very definition of the sale of rights and a breach of the obligation to protect the public interest. Furthermore, the Greek government, through its majority on the board of directors, is literally «kicking» employees out of management, unilaterally revoking a long-standing right of employees at the country’s largest energy group. As for the second point, of course no one would expect the New Democracy government to show any sensitivity toward labor rights—after all, the new bill from the Ministry of Labor is expected.
It is a fact that the Hellenic Petroleum Group is entering a new era—that of the energy transition— and serious strategic planning is required to meet the new challenges and maintain the important role it has developed in recent years as a leading player in Southeast Europe. In this context, however, the strategy of the New Democracy government is clearly evident: for the ELPE Group to be transferred in its entirety to the Latsis Group. The Board of Directors meeting during Holy Week was apparently intended to seal an agreement and a course of action that had been set in motion some time ago.
The Hellenic Petroleum Group’s new strategy, therefore, calls for to transfer management to the Latsis Group, to abolish employee representation on the Board of Directors, and to establish a holding company, likely based in Switzerland (where, incidentally, companies of the Latsis Group are headquartered), for which the needs it will serve are still unclear, while the arguments for facilitating financing are hardly convincing, especially given that well-known companies that have tried this approach have failed to achieve anything.
In any case, the government’s intention to have the state participate in a holding company based in Switzerland (if this scenario is ultimately confirmed) raises significant questions.
In July 2019, the New Democracy government took over the ELPE Group, which recorded historically high profitability figures during the 2015–2019 period, which amounts to an average of comparable earnings (EBITDA) of 763 million euros compared to 373 million euros during the 2009–2014 period, despite the generally and specifically adverse international economic environment in the refining sector. Furthermore, during the same period, Hellenic Petroleum recorded strong performance on ESG indicators. These achievements were made while the company was under the management of the Greek government. Therefore, the question naturally arises: what need justifies transferring management to a private shareholder, following Hellenic Petroleum’s successful performance in recent years, especially since this provides the government with additional value in the shares it holds?;
With regard to the ESG (Environment, Social, Governance) factor cited by Hellenic Petroleum’s management, it should be noted that the company’s relations with its employees constitute a significant aspect of the social criteria. And this raises another important question: By eliminating employee representation on the Board, a move that has already—and rightly so—sparked a storm of protest among Hellenic Petroleum’s labor unions and constitutes an attack on hard-won labor rights—how exactly are social criteria being served?;
In conclusion, the government appears to be unfolding its strategy for the Hellenic Petroleum Group, which is nothing other than its long-standing, general policy of serving major private interests. And in the end, what «investment boom» was it talking about during the election campaign?;
Why don't we see any investments, only services?.
By Panos Skourletis, Parliamentary Spokesperson for SYRIZA – Progressive Alliance.
