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Major fraud uncovered at Ukraine's state-owned grain trader

The company's former managers and an international grain trader are reportedly involved.

Major fraud uncovered at Ukraine's state-owned grain trader
Photo: minagro.com.ua

The National Anticorruption Bureau of Ukraine (NABU) on 24 January detained a former head of the analysis department of the State Food Grain Corporation (SFGC) and a representative of an international grain trader on suspicion of inflicting over 60m dollars in losses on the company.

Large sums of money and computer equipment were confiscated during the searches, the NABU said on its website.

Investigators have learnt after his employment by the company, the manager and his colleagues formed a group for personal profiteering.

"They worked out a scheme in which grain owned by the SFGC was sold underpriced to one of international grain traders through a number of private intermediary companies under the control of the SFGC and the mentioned grain trader," the statement reads.

The international trader then sold the grain at market prices. The margin was deposited on the account of an intermediary company controlled by the suspect. According to contracts, grain was supplied on cash on delivery terms, which was at variance with the established market rules and put the state-owned company at risk of not getting paid for its output.

As a result, the SFGC did not receive most of the due payments, incurring the losses of over 60m dollars.

The NABU opened a pre-trial investigation into the suspected fraud in July 2016. Its detectives are now tracking down other participants in the scheme.

The State Food Grain Corporation of Ukraine is the operator of Ukraine's grain market, a market leader in grain storage, processing, reloading and export.