Ukraine's anti-corruption bodies on April 2 announced charges in a corruption case involving overpriced food purchases by the Defense Ministry between 2022 and 2023.
A former department head at the Defense Ministry, an owner of supplier companies, two heads of supplier companies, and one more individual were charged by the National Anti-Corruption Bureau (NABU) and Specialized Anti-Corruption Prosecutor's Office (SAPO) with embezzling Hr 733 million ($17.7 million) and attempting to embezzle Hr 788 million ($19 million).
The corruption case was first reported by the ZN.UA outlet in January 2023 and sparked a major scandal within the ministry as it unveiled purchases of food commodities, such as eggs, at greatly inflated prices.
According to ZN.UA's sources, the case involves food supplier Tetiana Hlyniana and the former head of the ministry's procurement department, Bohdan Khmelnytskyi. The agency is also reportedly examining the roles of former Deputy Defense Minister Viacheslav Shapovalov and ex-Defense Minister Oleksii Reznikov.
The scandal is often named one of the main reasons for Reznikov's eventual dismissal in September 2023.
The scheme involved purchasing supplies for the military through so-called food kits, which had a set price that matched the average cost of all the food products included.
However, common foodstuffs, such as meat, vegetables, or cereals, would comprise only about 10% of the kit, while the rest would consist of spices, berries, and other items that were ordered rarely or never.
The scheme's perpetrators then overcharged for popular products and undercharged for less-used products. This meant that the ministry greatly overpaid for common foods like potatoes or eggs.
Two supplier companies thus pocketed excess profits of Hr 733 million. NABU said some of those funds were later withdrawn as dividends and used by an owner of one of the companies to purchase hotels and other real estate in Croatia.
The media investigation in January 2023 helped prevent the embezzlement of further funds amounting to Hr 788 million, according to the statement.
The investigation, launched immediately after the media revelations, is ongoing as NABU and SAPO work to identify other suspects.
Kollen Post
(Updated: )
