The case of corruption at JSC 'Ukrzaliznytsia' has been referred to the court
The prosecutor of the Specialized Anti-Corruption Prosecutor's Office (SAP), based on materials from the pre-trial investigation by the National Anti-Corruption Bureau of Ukraine (NABU), has forwarded to the court a case concerning the embezzlement of funds of JSC 'Ukrzaliznytsia' and the legalization of property. This case involves an organized group, including an advisor to the Office of the President of Ukraine, who later became an officer of the Security Service of Ukraine (SBU), as well as other participants who facilitated the purchase of power transformers at inflated prices.
According to the information obtained during the investigation, from June to December 2022, the procurement of transformers was ensured at a price twice as high through controlled officials of JSC 'Ukrzaliznytsia'. These transformers were purchased through a registered Bulgarian shell company from an Uzbek manufacturer and resold to JSC 'Ukrzaliznytsia' through a Ukrainian shell company. As a result of this scheme, JSC 'Ukrzaliznytsia' suffered losses of 95 million hryvnias.
Corruption schemes and their consequences
The leader of the organized group and its co-organizer conspired with another organized group led by a current member of the Ukrainian parliament and a private entrepreneur. This group controlled the supply of cable and wire products to JSC 'Ukrzaliznytsia' from October 2021 at inflated prices. In exchange for 7% of the procurement volume, the organized group guaranteed the member of parliament and the entrepreneur further supplies. In 2021-2022, two enterprises controlled by these individuals won the tenders for cable and wire products, which led to losses exceeding 140 million hryvnias.
Additionally, an SBU official legalized funds obtained as a result of criminal activities from 2016 to 2021, totaling more than 173 million hryvnias. The legalization of these funds took place through the purchase of elite residential and commercial real estate in the Pechersk and Shevchenkivskyi districts of Kyiv. It was also noted that the funds were transferred to the accounts of controlled individual entrepreneurs under the guise of paying for beauty salon services. A realtor, who acted as an accomplice in the legalization, assisted in registering real estate in the names of fictitious persons, undervalued the appraisal value, and sought financial institutions that inadequately verified the origin of the funds.
The actions of the mentioned individuals were classified under part 5 of Article 191 and parts 2 and 3 of Article 209 of the Criminal Code of Ukraine. It is important to note that according to the Constitution of Ukraine, part 1 of Article 62, 'a person is considered innocent of committing a crime and cannot be subjected to criminal punishment until their guilt is proven in a lawful manner and established by a guilty verdict of the court.'
This case represents an important stage in the fight against corruption in Ukraine, as it documents the connection between high-ranking officials and organized criminal groups. The prosecutor's office continues active work on investigations related to abuses in the public sector, especially in wartime conditions, when every hryvnia is of great importance to the country's economy. The consideration of this case in court could set an important precedent for further anti-corruption initiatives and holding those guilty of corruption schemes accountable.
The ongoing investigations into corruption at state enterprises are revealing alarming trends. Similar to the recent case involving JSC 'Ukrzaliznytsia', where significant embezzlement was uncovered, the court is set to examine the actions of former regional leaders and their associates in another high-profile case of misappropriation amounting to UAH 392 million. Such cases highlight the pervasive issues of corruption within public procurement processes in Ukraine. For more insights on this unfolding situation, see the details of the court proceedings involving former officials.