The Pivdennoukrainsk City Council is deciding what to do about a municipal enterprise that has accumulated debts of over a million

The Pivdennoukrainsk City Council is considering what to do about a municipal enterprise that has become loss-making. Photo: Executive Committee of the Pivdennoukrainsk City Council

The «Kobzar» municipal enterprise in Pivdennoukrainsk has been operating at a loss since 2024. The enterprise owes 663,000 hryvnias to the city budget alone, and a further 500,000 hryvnias to suppliers. The police are examining the documentation. Meanwhile, councillors and officials are seeking a solution on how to proceed: whether to merge «Kobzar» with another municipal enterprise or to wind it up.

This came to light during a session of the Pivdennoukrainsk City Council, according to NikVesti.

Deputy Mayor Mariia Drozdova reported that, prior to the appointment of a new director in March 2024, the enterprise had been operating at a profit. After that, it began operating at a loss, despite having been allocated funds on numerous occasions.

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«However, by the end of the first half of 2025, the company had already incurred a loss of 409,000 hryvnias. The audit committee also rated the company’s performance as unsatisfactory. It should be noted that these negative financial results arose despite the company having received repeated financial support from the local budget that same year, including repayable financial assistance of 663,000 hryvnias, as well as other funds which, following a decision by the city council, were allocated specifically to support the operations of this particular enterprise,» said Mariшa Drozdova.

At a meeting of the Audit Committee in October 2025, it was proposed that the «Kobzar» Municipal Enterprise be merged with the «Krytyi Rynok» Municipal Enterprise or another municipal enterprise. The enterprise’s operations were also scrutinised by a working group comprising representatives of relevant departments and councillors. However, as Maria Drozdova noted, the working group was not provided with many documents, in particular the financial reports for 2025. Violations of document management procedures were also recorded, as well as a discrepancy between the actual balance of funds and the amount recorded at 58,700 hryvnias.

Mariia Drozdova noted that the mayor had been informed on several occasions about the situation at the enterprise. Subsequently, the head of the legal department proposed appointing the chief accountant, who is currently acting as director, as head of the enterprise on a probationary basis. As neither the mayor nor the councillors have any direct authority over the accountant without a formal appointment, only the acting head of the enterprise can dismiss her.

The second option is to appoint the head of the «Krytyi Rynok» municipal enterprise to the post on a 0.25-rate basis. Mariia Drozdova noted that this enterprise had no objections and was prepared to provide financial assistance to resolve the situation.

«But, unfortunately, no management decision regarding this has been taken to date,» said Maria Drozdova.

Mayor Valerii Onufriienko responded to this comment. According to him, it is not possible to appoint the head of another enterprise to a 0.25-rate position, as he already has such commitments. Mariia Drozdova pointed out that these proposals had already been made in the spring and summer, so it is now time to tackle the current issues.

She emphasised that the key issue is the enterprise’s director. Without appointing one, it will be impossible to proceed with resolving matters, particularly reorganisation or liquidation. But there is another issue — the funds from the repayable financial assistance.

«The enterprise has still not repaid 663,000 hryvnias. We approached you before the New Year with a request to convert this into non-repayable aid. We realise that, as things stand, the enterprise simply does not have the financial resources to repay this aid. We must recognise that the company’s primary debt is to the local budget. This is because, as things stand, the company also owes money to other suppliers and in taxes; as of August 2025, the estimated deficit stands at minus 500,000, in addition to these 663,000 hryvnias,» noted the deputy mayor.

In addition, it is proposed that 1.5 million hryvnias from the so-called revolving fund be transferred from the «Kobzar» municipal enterprise to other municipal enterprises. The police are also investigating the situation at the enterprise: they are examining the documents.

The Pivdennoukrainsk City Council is considering what to do with the municipal enterprise, which has become loss-making. Photo: Executive Committee of the Pivdennoukrainsk City Council

Councillors also noted that a suitable manager needs to be found.

«I agree with you; we are looking for a manager. So far, no one is willing to take the post,» said Mayor Valerii Onufriienko.

It was also mentioned that, in the event of a merger between the two enterprises, 663,000 in debt would have to be «written off». However, the remaining stock should be sufficient to settle the debts.

«In fact, the enterprise is ready either for transfer or for liquidation. As of today, there are two employees left at the enterprise: a sales assistant and the chief accountant. She isn’t taking on any new staff. It’s peak season for them right now, so they’re trading, but as soon as the school term ends, I hope we’ll all decide together to sell off the stock and suspend operations until the matter is resolved. It’s simply the peak season at the moment. They’re more or less managing to keep things afloat because people are still going to «Kobzar»,» noted Mariia Drozdova.

The councillors wanted to hear from the mayor how he envisaged resolving the issue with the municipal enterprise. Some of them believed that the appointment of the enterprise’s director had been the cause of the current situation.

«If there’s a chance to take the helm at «Kobzar», there’s no question about it: we should keep it going. I’m all for it,» said Valerii Onufriienko.

However, Mariia Drozdova replied that there were no takers for the role of director of the loss-making municipal enterprise. She believes that a sensible option would be to merge with «Krytyi Rynok» in order to implement anti-crisis measures.

Councillors proposed working through all possible options before the next session, so as not to drag the situation into the following year.

It should be recalled that on 14 July, at a meeting of the Committee on Housing Policy and Municipal Services of the Pidennoukrainsk City Council, councillors instructed the city council’s lawyers to refer the matter to the law enforcement authorities. Members of the committee noted that it is necessary to establish who is to blame for the company’s debts and to hold them to account.