A senior Ukrainian Defence Ministry official has been detained over allegations he embezzled 1.5 billion Ukrainian hryvnia ($40 million) relating to an artillery shells contract, according to the Ukrainian Security Service (SBU).
The SBU says the official signed an agreement with a special export company to purchase a wholesale batch of artillery shells in December last year.
However, a more favourable contract for the supply was later signed with the same manufacturer – one that did not involve intermediaries. The SBU said this significantly shortened the delivery time and reduced the cost of the products.
According to the SBU, the defense official extended the original – more expensive – contract and funds totalling 1.5 billion Ukrainian hryvnia ($40 million) were transferred to the accounts of an affiliated foreign intermediary firm.
The SBU says it has found documents confirming the illegal activity. The official faces up to 15 years in prison if found guilty.
The Ukrainian Ministry of Defense said it was taking measures to try to recover the funds.
According to the Head of the Press and Information Department of the Ukrainian Ministry of Defense, Illarion Pavliuk, the contract was one in which payment was made, but no deliveries had taken place. As a result, he said lawyers were looking at options to terminate the contract and recover the funds.
