The Security Service of Ukraine (SBU), with the assistance of the minister of defence of Ukraine, uncovered an attempt to embezzle UAH 1.5 billion for the purchase of artillery shells for the Armed Forces. The head of one of the Defence Ministry's main directorates, who is suspected of involvement in the fraud, was detained in Kyiv, the SBU press service has said.
"According to the investigation, in December last year, an official of the Ministry of Defence signed an agreement with a special export company to purchase a wholesale batch of artillery shells for Ukrainian defenders. But then the budget funds were not transferred to the accounts of the special exporter," the SBU said.
Subsequently, the newly created Defence Procurement Agency of the Ministry of Defence signed a more favourable contract with the same manufacturer for the supply of the same artillery shells.
The new contract provided for the purchase of ammunition without intermediaries, directly from the manufacturer. This significantly shortened the delivery time and reduced the cost of the products.
However, the official, ignoring the Defence Procurement Agency contract, unreasonably extended the previous agreement with the special exporting company.
After the "old" contract was extended, almost UAH 1.5 billion was transferred to the accounts of the affiliated foreign intermediary firm. This amount exceeded the value of the products under the direct contract with the manufacturer by 30%.
During the searches, law enforcement officers found documents confirming the illegal activity.
Within the framework of criminal proceedings initiated by the SBU investigators under Part 2 of Art. 114-1 (obstruction of lawful activities of the Armed Forces and other military formations) of the Criminal Code of Ukraine, the issue of serving the official a notice of suspicion is being decided.
The official was suspended from his duties, and the Ministry is taking steps to return almost UAH 1.5 billion misappropriated funds to the Ukrainian budget.
The investigation is ongoing and the official faces up to 15 years in prison.