The CEO of Polish state-run coking coal producer JSW was sacked by the energy ministry on Tuesday following a dispute over strategy.
Shares in the company fell more than 6% on the news, which added to broader investor concerns that Poland’s government is interfering in state-run and listed companies to use them for political projects, including investment designed to sustain the coal industry.
Daniel Ozon, who has been CEO since 2017, has had the support of private shareholders and trade unions, but has fallen out with the energy ministry over strategy and had already survived previous attempts to oust him.
“The supervisory board lost trust in him,” Energy Minister Krzysztof Tchorzewski told JSW miners, after the company’s supervisory board officially sacked Ozon at a meeting on Tuesday morning. His current term as CEO had been due to end on June 29.
Hundreds of miners travelled to Warsaw on Tuesday morning to protest against Ozon’s dismissal. Under Ozon, JSW agreed to raise salaries by 7% last year and pay out a one-off benefit.
Ozon has rebuffed some of Tchorzewski’s proposals for JSW money to be used to support national projects, including the construction of a coal-fuelled power plant in Ostroleka, northeastern Poland, and taking over a troubled thermal coal mine.
The state owns 55% of JSW.
Shares in JSW fell as much as 6.4% on Tuesday amid investors fears that JSW will now finance unprofitable investments in national coal-related projects.
By 09:48 GMT the shares were down 5.05%.
Under Ozon, JSW launched a special fund where it put aside part of its profits to be used during periods when coal prices are low.
On Monday, Ozon said he was recently asked to invest in Brzeszcze coal mine, currently owned by indebted state-run utility Tauron and refused.
“No money was taken from the company and there are no plans that any money will be taken,” Tchorzewski also said.
Ozon was not immediately available to comment.
“The market anticipates that new a chief executive might be more submissive and inclined to finance some of the minister’s projects,” said Robert Maj, analyst at Ipopema Securities.
“There is more room for a fall in the share price. The CEO issue adds to other risk elements, such as those related to ArcelorMittal,” Maj said.
ArcelorMittal, which is JSW biggest client, said last month that it plans to temporarily shut its blast furnace in Krakow, and analysts are concerned the steel giant may reduce orders from JSW.
The terms of all of JSW’s current management board ends on June 26. A process for selecting new management is underway, and the deadline for submissions was midday on Tuesday.
(By Agnieszka Barteczko and Pawel Florkiewicz; Editing by Susan Fenton)