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The privatization of Ukraine's decrepit power infrastructure continued on its dodgy path on February 13, when Konstantin Grigorishin's Energy Standard Group (ESG) and Dutch-based VS Energy divvied up a pair of 50% stakes in power supply companies.

With the Dutch company as its only rival bidder, ESG paid UAH176m ($22m) for a 50% stake in Vinnitsyaoblenergo - just 5% over the starting price. An hour later, VS Energy beat ESG with a bid of UAH141m to take a 50% stake in Zakarpattiaoblenergo, on a starting price of UAH135m. Analysts are speaking of an obvious stitch-up.

Suspiscion over uncompetitive privatization has plagued the process in Ukraine for years, with limitations on selecting bidders leading to suspisciously low pricing, thus costing the cash-strapped state billions of hvryna in potential revenue.

Adding to the suspicion of a stitch up was the exclusion from the Vinnitsyaoblenergo privatization auction of energy oligarch Grigoriy Surkis's Lvivoblenergo, for apparently failing to submit all necessary documents. "Lvivoblenergo believes that attempts not to allow the company to participate in the tender [was] with bias and in the interests of one of the bidders, and not in the interests of the state," the company said in a press release.

Both the winners of the two respective tenders already held stakes in the respective companies, meaning they have now acquired controlling stakes. ESG held a 20.3% stake in Vinnitsyaoblenergo, while VS Energy held a 10.53% stake in Zakarpattiaoblenergo. The state retains a 25% blocking stake in both companies, which was an additional deterrent to further competitors, since a controlling stake would have been difficult to amass.

"The disqualification of Surkis is in line with our vision that minority shareholders (VS Energy, Energy Standard and DTEK) have already distributed the oblenergo [Ukraine's power distribution companies] stakes to be privatized between themselves," writes Concorde's Alexander Paraschiy. "The only sweetener in this deal is Vinnitsyaoblenergo's deal price of UAH113 per share, which is far above the market price," he adds, noting that the last deal in the company's shares took place at UAH20.