(Reuters) – Ukraine’s SBU security service and the Defence Ministry announced on Friday that they had discovered a fraudulent scheme involving the purchase of artillery shells, which led to the embezzlement of almost $40 million. Corruption in Ukraine has become increasingly important as the country seeks to join the European Union, more than 30 years after the end of Soviet rule.
Corruption in the military, particularly in procurement, has caused several major scandals in recent years. The SBU’s statement revealed that the corrupt scheme focused on contracts for the procurement of artillery shells. A contract to acquire the shells at higher than market prices had been abandoned by the defence ministry’s new procurement agency. Instead, a new deal was made to eliminate intermediaries and significantly reduce the price.
However, a senior ministry official extended the previous contract, and nearly 1.5 billion hryvnias ($40 million) were deposited into accounts belonging to intermediary firms. The official, who is the main suspect in the case, has been relieved of his duties, and legal proceedings have been initiated against him in an effort to recover the misappropriated funds. A Defence Ministry statement revealed that the scheme was uncovered the previous week, and an audit has confirmed the illegal activity. Searches were conducted within the ministry and at other premises.
($1 = 37.5200 hryvnias)
Reporting by Ron Popeski and Oleksandr Kozhukhar; editing by Jonathan Oatis
