Urals Energy oil subsidiary inexplicably buys unseaworthy passenger ship

17th Dec 2018 13:54

(Sharecast News) - Exploration and production outfit Urals Energy has been made aware of an irregular transaction made by one of its oil subsidiaries.Urals believes JSC Petrosakh president Sergey Kononov authorised the acquisition of a passenger ship, which is being sold by the government of Sakhalin Island, without consulting with its board.Petrosakh participated in and won a public auction for the ship and, while Urals noted that no money had been exchanged, the AIM-listed group will inevitably be presented with a purchase agreement for the asset to the tune of RUB 10.7 (£127,410).Urals, which also believes the ship may not be seaworthy as it lacks a fully functioning engine, has requested an explanation from Kononov regarding the business purpose for the purchase of a passenger ship in such condition but has not yet received a response.Urals Energy told investors back in October that an unauthorised loan and asset sale had led to a combined working capital deficit of roughly $1.6m.Back then, it was looking into a loan that had been offered without the board's knowledge by Kononov and demanded that it be repaid in full to restore its "significantly constrained current working capital position".Urals has formally requested Kononov stand down from his position as president of the 98.56% owned subsidiary. He has refused to do so and has also failed to accept "proper responsibility for his actions and the negative impact that these actions have had on the group and the company's shareholders"As of 1400 GMT, Urals shares had slipped 3.51% to 29.50p.