CEO of Polish Energy Company Orlen Leaves After Controversial Tenure

Maciej Martewicz
·3 min read
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(Bloomberg) -- Daniel Obajtek, the controversial chief executive officer of Polish energy group Orlen SA will leave next week, ending an era at the state-run company during which it grew into a national champion and critics accused it playing politics.

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The supervisory board, dominated by members picked by the previous government, dismissed the CEO as of Feb. 5, it said in a regulatory filing. Earlier in the day, Obajtek told Radio Zet that he won’t stay beyond next week, when the new administration replaces the board.

Shares in Orlen jumped as much as 3.8% on Thursday, the most in nearly two months. The stock has declined nearly 40% since Obajtek took over in February 2018, even as the company increased dividends and reported record profits after absorbing other state-run oil, gas and energy firms.

The CEO, a member of the former ruling Law & Justice party which lost power in last year’s elections, drew heavy criticism during his reign at the oil refiner as he spearheaded government-backed takeovers and was accused of using his position to help his political allies. He slashed fuel prices before last year’s ballot, in a bid to reduce runaway inflation, stoking shortages as the low prices lured foreigners to filling stations.

Last month, state prosecutors started several probes into Orlen’s acquisition of smaller rival Grupa Lotos SA as well as its pricing policy before the ballot. Norges Bank Investment Management, Norway’s wealth fund, put the company on watch list due to worries over press freedom following its acquisition of local newspapers, which became mouth pieces for the government.

‘Gift From God’

Under Obajtek, the Plock-based refiner embodied the government’s drive to “re-Polonize” the economy with the state playing the leading role, paying little attention to minority investors or corporate governance.

Before Law & Justice came to power in 2015, Obajtek was the mayor of Pcim, a rural community in southern Poland of just 11,000 people, compared with 65,000 workers currently employed by Orlen.

His corporate career skyrocketed since, especially since Law & Justice leader Jaroslaw Kaczynski called Obajtek’s organizational skills a “gift from God.” He said Obajtek was an “extraordinary” person who can “do a lot more” for Poland, stoking speculation that the CEO could enter politics.

But since Law & Justice lost power, Obajtek’s fate appeared doomed. New Prime Minister Donald Tusk promised to oust the managers in all state-run companies during his first 100 days in office, which end in late March. The premier indicated that the new board members will be selected through an open recruitment process, but the government plans to keep a bigger grip on several strategic companies.

According to Business Insider Polska, former head of state utility Enea SA Krzysztof Zamasz is the favorite to replace Obajtek, while Beata Stelmach and Jacek Krawiec are also being considered for the post.

(Updates with board decision to dismiss Obajtek, share price from the first paragraph.)

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