10.10.2024 Corruption Kyiv Tenders Utility scams

Instead of the subway, luxury cars for oligarchs. “Monakivtsi seize subsoil, budget and international aid

Vitaliy Khomutynnik: Those who help everyone are wasting their time | Ekonomichna Pravda

The construction of the Vynohradar metro station is shrouded in fraud and embezzlement. Back in October 2018, Kyivmetrobud JSC won a tender for the construction of new metro stations worth a total of UAH 5.9 billion.

According to the original plan, the work was to be completed by December 2021. However, at that time, there was a corporate conflict between the contractor’s shareholders, which already indicated possible delays in the work, as internal disputes in the management make it difficult to effectively manage large projects.

One of the key beneficiaries of Kyivmetrobud at the time of the tender was Dmytro Davtyan, who headed the KCSA’s Department of Transport and lobbied for his own interests during the tender. He received a controlling stake in the company after a raider seizure of the shares from former MP and Ukrbud owner Maksym Mykytas.

Later, Kyivmetrobud’s shares were ceded to a former Party of Regions member, pro-Russian politician Vitaliy Khomutynnik.

History of budget transfers

As of 2024, Kyivmetrobud has received and spent about UAH 4 billion, of which UAH 533 million was transferred from the treasury account in October 2022.

Although the law allows for an advance payment of 30% of the contract amount, the contractor received 50% of the funds. At the same time, the status of the work is 10-12%. As of today, a part of the protective structure “wall in the ground” has been built and a partial shield tunnel from Mostytska station to Syrets has been completed.

Under the terms of the contract, the client had the right to cancel the contract and claim damages if the contractor did not complete the work on time. However, the real reason for the delay is not the failure to meet the deadlines, but the fact that approximately 99% of the advance funds were stolen and taken abroad.

And although Khomutynnik, as the final beneficiary of Kyivmetrobud, is now supposed to return the funds to the budget, this can only be expected from the formal side.

After the publication of journalistic investigations into this large-scale theft, the NABU stepped up its activities and increased the number of detectives involved in the case.

Kyiv Mayor Vitali Klitschko and the head of the subway, Volodymyr Braginsky, rushed to terminate the agreement with Fuks, but the prospects for recovering the stolen 4 billion remain uncertain.

Khomutynnik seizes Kyiv’s budget

Despite the scandals, Khomutynnik and his Kyivmetrobud were given the largest procurements of the Kyiv Metro. Without competition and auction.

I wonder where Braginsky and Klitschko were looking?

In particular, Kyivmetrobud won the following procurements:

  • Construction of a section of the Syretsko-Pecherska subway line from Syrets station to Vynohradar residential area with an electric depot in Podil district (section from Syrets station to Prospekt Pravdy station with two stations (Mostytska and Prospekt Pravdy) and a section of the forked branch towards Vynohradar station (I stage of construction)) for a total amount of UAH 5,981,268,736.07.
  • Overhaul of Svyatoshyn station of the Svyatoshynsko-Brovarska subway line for a total amount of UAH 153,688,320.00.
  • Overhaul of the Svyatoshyn station of the Svyatoshynsko-Brovarska subway line (project adjustment) for a total amount of UAH 76,398,826.37.

However, it is worth noting that Kyivmetrobud is only one of Khomutynnik’s structures that successfully divert the budget. The list of companies controlled by the man also includes POSITIVE-V LLC, TRK TECH LLC, KIEVMETROTONELBUD LLC, SUN CAPITAL PRIVATE FOUNDATION, Vantaris LTD, which are part of the conversion center.

In addition, it was found that there are enterprises in the supply chain with signs of riskiness that do not have enough industrial capacity and employees to fulfill the contracts.

For example, the budget funds received by Kyivmetrobud JSC under tenders were initially transferred to POSITIVE-V LLC by concluding fictitious contracts. Subsequently, from POSITIVE-V LLC they were transferred to TRK TECH LLC, at the expense of which the said company purchased a Mercedes-Maybach S 580 4MATIC for UAH 9,800,000.

At the same time, TRK TECH LLC has a charter capital of UAH 10,000, 1 employee, and the main activity is 63.12 (web portals), and therefore there is no need to purchase the said luxury car.

These transactions and purchases indicate the legalization of funds received by Kyivmetrobud as part of the tender offers.

Thus, Khomutynnik continues to embezzle the Kyiv budget. Khomutynnik is also a member of the Monakivtsi criminal group, which has already seized subsoil, budgets of frontline regions, and production of excisable goods.

One of the most prominent examples is Ukrnaftoburinnya, the country’s second largest private gas producer in terms of gas production, which Khomutynnik owns together with Kolomoisky. The ex-regionalist also owned a stake in Ukrgasinvest with the “Monaco battalion” Abramovich.

We filed a criminal complaint with law enforcement agencies regarding the seizure of Ukraine’s subsoil by Khomutynnik and the Monaco Battalion, as well as the manipulation of the capital’s budget. Following consideration of the first one, the Oktyabrsky District Court of Poltava ordered officials of the State Bureau of Investigation in Poltava to launch a pre-trial investigation (case No. 554/8738/24).

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