Kyiv's Solomyanskyy district court has placed the director of the Lviv armour plant, Roman Tymkiv, into custody until 11 September. He will be released from custody, if he pays 2m hryvnyas [77,000 dollars].
Several MPs from the propresidential Petro Poroshenko Bloc offered to vouch for Tymkiv.
Tymkiv's deputy Oleh Tkachenko was also arrested and granted a 1.8m-hryvnya bail.
According to prosecutors, instead of equipping T-72 tanks with new engines, Tymkiv bought used engines which were sold by the Defence Ministry in 2008-2009 as excess propertyEngines of this model have not been manufactured the 1990s.
Thus he is suspected of embezzlement to the tune of 28.5m hryvnyas.
Apart from Tymkiv and his deputy, law enforcers detained the head of the Central Armour Directorate of the Ukrainian Armed Forces (major general), a section head of the Central Armour Directorate of the Ukrainian Armed Forces (colonel), and the founder of a limited liability company used in the scheme.