Agreement on the illegal sale of 649 thousand tons of coal at a reduced price was invalidated after the NABU filed a suit

The agreement between the State Enterprize “Coal Company “Krasnolymanska” (hereinafter — SE “CC “Krasnolymanska”) and intermediary company for supply of 649 thousand tons of coal at a reduced price was declared invalid. Such a decision was taken on May 22, 2019, by the Northern Commercial Court of Appeal on the suit of the National Anti-Corruption Bureau of Ukraine (hereinafter — NABU).

The lawsuit was filed on the materials of the pre-trial investigation of the NABU Detectives. The investigation revealed that at the time of the signing an agreement the SE “CC “Krasnolymanska” Management knew that the end consumer of its coal is the PJSC “Centrenergo” (78.289% of the shares belong to the state). Instead of delivering directly, the intermediary company (LLC “Dantrade Ltd.”) was illegally involved into the scheme. Due to it in 2015-2016, SE “CC “Krasnolymanska” sold 649.1 tons of G-grade coal (0-100) at a price that was almost for a third below the market at that time. The LLC “Dantrade LTD” resold the same coal to the PJSC “Centrenergo”.

According to the investigation, the presence of an intermediary in the coal supply scheme between the two objects of state ownership was illegal and cost 310 million UAH to the state interests.

The court decision came into force. That allows state-owned enterprises to recover significant funds from a private company.

This is the second contract for the supply of coal to the state-owned company SE “CC “Krasnolymanska” invalidated after the NABU filed a suit. The first agreement for the supply of 65,128 tons of coal was declared invalid in December 2018 by the Eastern Commercial Court of Appeal. The Supreme Court confirmed the legality of this decision in March 2019.