Over UAH 400 million in damages to state: ex-State Property Fund deputy head served with charges (SCHEME)

NABU and SAPO continue to expose top-level corruption. On Dec. 12, 2023, another participant in the criminal organization run by the former head of the State Property Fund was notified of suspicion. Their actions led to over UAH 400 million in damages to the state, and the exposure became one of the most significant cases in the history of Ukraine's anti-corruption agencies. The charges have been brought against the former first deputy head of the State Property Fund (2021), who currently holds a position at PJSC "Ukrnafta."

His actions fall under Part 3 of Article 255 of the Criminal Code of Ukraine.

In total, there are 11 suspects* in the criminal case:

• the head of the State Property Fund of Ukraine (crime boss);
• a close associate to the head of the SPFU (co-organizer);
• an adviser to the head of the SPFU;
• the first deputy head of SPFU;
• two acting directors of JSC "Odesa Port Plant" (in different periods);
• the acting head of JSC "United Mining and Chemical Company";
• two owners of the LLC that won the auction at Odesa Port Plant;
• two accomplices in the crime.

*positions at the time of the crime

NABU and SAPO have established two episodes of the group's criminal activity. The first one involves corruption at the state-owned Odesa Port Plant. At the beginning of 2020, the SPFU head secured the election of loyal members of the plant's supervisory board, who later approved the appointment of a member of the group as the director of the plant. During May 2020-October 2021, the then SPFU head, his associate, two acting directors of the plant, and two owners of the LLC secured the prolongation of additional agreements with the LLC under their control on the processing of gas into urea and ammonia at low cost. Subsequently, the members of the group realized that the constant, groundless extension of the contract between Odesa Port Plant and the controlled LLC might raise questions. Therefore, they conducted a competitive selection of a new raw materials supplier, assuming that the company under their control would win it. When things turned out differently, they illegally canceled the results and signed a contract with a predetermined LLC. The investigation gathered enough evidence that the competition was deliberately disrupted. This is confirmed by the correspondence among the group members.

As a result, from May 2020 to October 2021, Odesa Port Plant lost more than UAH 300 million.

The second episode involves the state-owned United Mining and Chemical Company. NABU and SAPO established that in October 2020, the SPFU head, as a crime boss, succeeded in appointing a loyal acting director of the company. The latter, following the instructions from above, during 2020-2021, deliberately concluded four contracts for the sale of titanium-containing raw materials (ilmenite concentrate) at discounted prices with a Czech company controlled by the adviser to the SPFU head. The concentrate was then resold at market prices, including to russian enterprises and those in the temporarily occupied Crimea.

This resulted in losses to the state worth over UAH 118 million.

Overall, in the two above episodes, the state lost more than UAH 400 million. 

On Nov. 23, 2023, NABU and SAPO updated charges against ten participants of the criminal organization. Consequently, these persons are also suspected of legalization (laundering) income acquired through criminal means amounting to over UAH 10 billion.

The actions of the suspects fall under Part 1 Art. 255 , Part 2 Art. 255, Part 3 Art. 255, Part 2 Art. 364, Part 5 Art. 191, Part 3 Art. 209 of the Criminal Code of Ukraine.

NABU and SAPO are identifying other participants in the crime and investigating other activities of the group.

The investigation is ongoing.