New Polish government dismisses Orlen chief as clean-up after PiS continues in state companies

The supervisory board of the Warsaw-listed Polish fuels and energy conglomerate Orlen dismissed CEO Daniel Obajtek on February 1.

Obajtek had earlier said he would be “at the disposal” of the supervisory board, which the new Polish government – which has a 49.9% stake in Orlen– is expected to overhaul next week.

The departure of the controversial executive, whose rise from an obscure local administrator to the CEO of Poland’s largest company took place under the previous government of Law and Justice (PiS), comes in the wake of the new liberal-left coalition government taking over in mid-December

The new Prime Minister Donald Tusk and his Minister of State Assets Borys Budka say that, under PiS, state companies became nests of cronyism and nepotism. 

Orlen's share price jumped 4.61% to PLN65.55 (€15.19) on the Warsaw Stock Exchange on February 1. 

During his six-year tenure at Orlen, Obajtek oversaw a period of significant change, including ambitious mergers and acquisitions. These included the acquisition of a stable of regional newspapers that Orlen turned into a mouthpiece for the PiS government.

The key deal – a merger with peer Lotos – is currently subject to an investigation. Despite the consolidation and access to new markets, Orlen’s stock lost nearly 40% during Obajtek’s tenure, reported Bloomberg.

Another probe centres on the company’s lowering of fuel prices between August and November last year, which critics say was a politically-motivated move to help PiS ahead of the October election. PiS came in first in the vote but still lost its majority in the parliament.

The Lotos merger probe comes in the wake of a yet unpublished report into the merger compiled by the state audit agency NIK.

The European Commission cleared the merger in 2021 pending Orlen’s meeting a list of conditions, such as divesting a 30% stake in the Lotos refinery in Gdansk as well as the sale of 80% of its fuel stations and offloading both Orlen and Lotos fuel terminals to a third party.

Orlen eventually sold the stake in the Gdansk refinery to Saudi Aramco, which also bought Lotos’ wholesale subsidiaries Lotos SPV 1 and Lotos-Air BP Polska for a reported PLN2.2bn (€500mn). 

The NIK’s report determined, however, that the divestment to Saudi Aramco should have brought Orlen as much as PLN9.4bn – the value of the assets in Lotos at the time of the merger, completed in 2022 – TVN24, a broadcaster, said in a report last week, based on a NIK report it obtained.

With Obajtek still at the helm last week, Orlen denied the charges, without denying the existence of the NIK’s report. 

The new government does not appear convinced.

"We will soon know everything, but one thing is certain: we lost billions of zloty, we lost a significant part of ownership and we gave money and a lot of power to Saudi Arabia," Prime Minister Donald Tusk told reporters on January 30.

Orlen is Poland's biggest company. It bulked up under PiS via takeovers of the power utility Enea and the oil and gas company PGNiG even before the Lotos merger.

Obajtek’s dismissal will be effective on February 5, a day before the extraordinary meeting of the company’s shareholders that is expected to replace the supervisory board and the rest of the management.