NABU, SAPO help return Zaporizhzhia Titanium and Magnesium Combine to state ownership

26.05.2022 00:00

The Civil Court of Cassation has upheld previous court decisions to end the agreement on the establishment of ZTMC Ltd, to which statutory fund an integral property complex of Zaporizhzhia Titanium and Magnesium Combine was included in 2013. This final decision was adopted on May 23, 2022. In fact, it means the return of a unique enterprise to state ownership.

The decision is based on the materials of NABU and SAPO collected as part of the respective pre-trial investigation. As established, TOLEXIS TRADING LIMITED (Cyprus) had not fulfilled its obligations as a co-founder of ZTMC Ltd. In particular, during 2014-2015, under the establishment agreement, TOLEXIS TRADING LIMITED allocated UAH 880 million to upgrade ZTMC Ltd production capacity. However, instead of modernization, the combine's director used most of the funds - UAH 492 million - for different purposes. In particular, he made payments supposed to be made by the Cypriot company and not by the combine.

Detectives began investigating these facts in June 2016. In September 2016, the combine's director was detained and notified of suspicion. In November 2016, the investigation was completed.

The decision to return the integral property complex to state ownership was initially passed by the Commercial Court of Zaporizhzhia region in July 2018, after which the appellate court upheld it. However, the Supreme Court partially upheld the co-owner's cassation appeal and remanded the case for retrial. As a result, the Commercial Court of Zaporizhzhia region, on Aug 4, 2021, ruled in favor of the state, to which the Central Commercial Court of Appeal fully agreed on Nov. 30, 2021. Finally, the Civil Court of Cassation came up with the verdict.

 

ZTMC Ltd was set up in 2013 by the State Property Fund of Ukraine (owns 51% of the authorized capital) and the Cypriot company TOLEXIS TRADING LIMITED (49%). The latter undertook to pay the debts of the state enterprise on the basis of which ZTMC Ltd was established and to invest USD 110 million in its modernization. Zaporizhzhia Titanium and Magnesium Combine is the only producer of sponge titanium in Europe.