Kreston Ukraine comment on inaccurate information from the @ kreston-gcg.com domain

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The KRESTON team expresses its respect and apologizes in advance for the fact that you may have witnessed black PR from persons unfriendly to the Kreston, who, as a result of some IT events, took over the @kreston-gcg.com domain and now may send false information from this address allegedly on behalf of Kreston.

We inform that the reform of Kreston in Ukraine has been completed. It was carried out among other things with the aim of centralizing management control over the quality of services provided. During the reform process, an internal audit was conducted and the work of the group’s personnel and management was evaluated, what lead to appropriate management changes.

The professionalism, quality of service and successful performance are and always will be the highest value for our team and in this matter there can be no compromises even in relation to ourselves.

The following comments will help to avoid any misunderstandings.

Kreston Global is an international audit network headquartered in London, UK. According to the Kreston Global decision of 20 September 2021, the right to provide exclusive services under the Kreston brand is granted to KRESTON UKRAINE, LLC (code: 22022137), which is confirmed by a membership certificate. Our company is listed on the official website of Kreston Global on behalf of Serhii Atamas, Managing Partner, and Andrii Popov, Partner and CEO.

https://www.kreston.com/members/kreston-ukraine/

S. Atamas and A. Domracheva, owners of Kreston Ukraine LLC, hold the rights to the Kreston trademark. The ownership rights were transferred through the mediation of a patent attorney, in accordance with legal requirements and registration procedures at the Ukrainian Institute of Intellectual Property.

As of October 8, 2021, KRESTON UKRAINE LLC is the only company that has been granted the right to use the Kreston trademark.

The transfer of Kreston’s activities in Ukraine to KRESTON UKRAINE LLC became a forced but absolutely legal measure. Both KRESTON GCG AUDIT LLC (31586485) and KRESTON GCG LLC (39212394) were excluded from the Register of Auditors and Audit Entities. The reason was the dishonest actions of Mr. Andrii Katchyk aimed at destabilization of our services: Mr. Andrii Katchyk presented his own wife with a stake (31%) in the share capital of these companies without the consent of other stakeholders, in violation of the charter. His wife is not an auditor, therefore this situation led to the admission of these companies non-compliant with cl. 2. art. 5 of the Law of Ukraine “On audit of financial statements and auditing”.

To ensure the continuity and reliability of service to our Clients, after the reorganization of the group management structure, our team of specialists continued to provide services on behalf of KRESTON UKRAINE LLC, which belongs to the Kreston Global network. This company was not affected by the corporate conflict.

KRESTON UKRAINE LLC is now included in the Register of Auditors and Audit Entities, registration number – 1132 (Section ‘AUDIT ENTITIES THAT HAVE THE RIGHT TO CONDUCT STATUTORY AUDIT OF FINANCIAL STATEMENTS OF THE PUBLIC INTEREST ENTITIES’).

KRESTON UKRAINE LLC has a Certificate of Compliance of the Quality Control System (APU decision of January 26, 2017 No. 338/3), which expires on December 31, 2022. When an AE’s Certificate of Quality Control Passage issued by the Audit Chamber of Ukraine expires, APOB regularly checks such the AE. Within the stipulated timeframe, the entity will undergo an external quality system review in the second half of 2022. This procedure is common and concerns every audit entity.

In addition we inform that the system of quality control at KRESTON UKRAINE LLC is built with a risk-based approach with a continuous monitoring process, so the entity can provide the external audit at any convenient time for APOB, which was notified to the Regulator.

We emphasize once again that the corporate conflict with the former partner of Kreston GCG has nothing to do with KRESTON UKRAINE LLC and does not affect the stability and quality of the company’s obligations.

As mentioned above, Mr. Andrii Katchyk voluntarily left the list of beneficial owners of both KRESTON GCG AUDIT LLC and KRESTON GCG LLC, donating his share to his wife. Given his destructive behavior that caused risks for the provision of audit services, the owners of Kreston GCG Group decided at a general meeting to exclude Mr. Katchyk from the management position (Part 3 Art. 99 of the Civil Code of Ukraine), and amended the USR.

The economic claim was filed by Mr. A. Katchyk and has no legal prospects on the invalidity of the decision of the general meeting, since the decision was made by a majority participants’ votes.

The criminal proceedings have been initiated or are planned to be initiated based on the signs of criminal offenses in the actions of Mr. A. Katchyk under Art. 191 “Appropriation, waste of property or taking possession of it by abuse of official position”, 3641 “Abuse of powers by an official of a legal entity of private law, regardless of the organizational legal form”, 206 “Counteraction to legal economic activity”.

17 employees (out of more than 150) have decided to leave Kreston GCG together with Mr. Katchyk. We note that the company respects the rights of each employee both during work and in the process of their dismissal. In accordance with the requirements of labor legislation, employees who have expressed their desire to resign were fully paid, a copy of the dismissal order was given to them, and their work record books were issued.

Once again, we apologize for the incorrect behavior of the former partner, who was trying to interfere with the reputation of the Kreston due to anonymous letters, seemingly on behalf of Kreston GCG.

We carry out the activities of a legal organizational nature that will minimize the manifestations of unfair behavior of the former partner and resolve the corporate conflict in the manner prescribed by law.

Best regards,

Andrii Domrachov

Managing Partner of KRESTON UKRAINE LLC

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