Pre-trial restriction chosen for Ukrainian Defence Ministry official suspected of embezzling US$39 million

Kateryna Sikora, investigating judge of the High Anti-Corruption Court of Ukraine (HACC), has applied a pre-trial restriction in the form of personal recognisance to Toomas Nakhkur, the suspended acting director of the Department of Military and Technical Policy, Development of Arms and Military Equipment of Ukraine’s Ministry of Defence.

Source: High Anti-Corruption Court of Ukraine on Facebook; Anti-Corruption Action Center on Telegram

Quote from HACC: "On 2 February, the investigating judge of Ukraine's High Anti-Corruption Court partially granted a petition lodged by a detective from the National Anti-Corruption Bureau and requested a pre-trial restriction in the form of personal recognisance for the acting director of a department of Ukraine’s Ministry of Defence who has recently been removed from office."

Details: The court imposed several obligations on Nakhkur, including: not leaving Kyiv without permission from an investigator, prosecutor or court; refraining from communicating with the individuals named in the court order; depositing his international travel passport(s) with the relevant state authorities; and wearing an electronic tag.

The measures will remain in effect for two months. The full text of the decision will be released on 7 February.

However, the judge refused to order that the suspect be detained with the option of bail of over UAH 268 million (about US$7.1 million), as requested by the prosecutor.

Nakhkur is one of five suspects in the alleged theft of nearly UAH 1.5 billion (roughly US$39 million) intended for the purchase of 100,000 mortar rounds for Ukraine's Armed Forces.

According to investigators, the Ministry of Defence officials knew in advance that the mortar ammunition would not be delivered, and no one in the Ministry of Defence had checked how it would be delivered from Croatia to Ukraine.

As the head of the appropriate Defence Ministry department, Nakhkur was in charge of ensuring the contract's terms were valid.

According to the prosecutor, Nakhkur signed off on the agreement and the decision to make a UAH 1.34 billion prepayment without properly checking all of the documents, tracking the order of delivery of mines, or properly checking the supplier, despite numerous violations of the law and the contract. The prepayment totalled 97% of the contract amount.

The defence maintains that Nakhkur was only the head of one of the departments within the Ministry and was only in charge of certain aspects that were within his area of responsibility.

More than ten other people approved the deal in addition to him. The defence argued that this is standard business practice, and there are no grounds for placing only Nakhkur under suspicion.

Details: The Ministry of Defence confirmed that Nakhkur has been suspended due to the announcement of suspicion in criminal proceedings. He received a notice of suspicion on 27 January.

Background: 

• On 27 January, Toomas Nakhkur, along with Oleksandr Liiev, the former head of the department, managers of the Lviv Arsenal company and a representative of a foreign firm were served with notices of suspicion in the case of embezzlement of almost UAH 1.5 billion for the purchase of ammunition.

Previously: 

• Earlier, Ukrainska Pravda reported that Lviv Arsenal received US$36.8 million from the Ukrainian MoD for the supply of a large batch of 120-mm and 82-mm mortar rounds, but the company is long overdue on the contract and had not handed over a single ammunition round to the Armed Forces.
• Yurii Zbitniev is the founder of Lviv Arsenal; he became one of the youngest members of the Verkhovna Rada [Ukrainian parliament] of the Ukrainian Soviet Socialist Republic in 1990. He also took part in creating the Social Democratic Party of Ukraine (United), but later left it.
• The Ukrainian Ministry of Defence reportedly signed a contract with a little-known company called Lviv Arsenal on 11 November 2022. A few days later, the then defence minister, Oleksii Reznikov, authorised an advance payment under the contract – almost 100% of the contract amount.
• Deliveries were supposed to begin in December 2022 and be fully completed by the end of February 2023. However, as Ukrainska Pravda reported, as of the end of July, the Defence Ministry had not received a single ammunition round under the prepaid contract.
• On 26 January, the Pivnichnyi (Northern) Commercial Court of Appeal upheld the decision of the first instance court to recover UAH 1.5 billion from Yurii Zbitniev's Lviv Arsenal company, which failed to comply with the contract to supply ammunition to the Ukrainian Armed Forces.

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