Is Citrus on the verge of bankruptcy? Twists, schemes

The Citrus electronics store chain is going through hard times. Just recently, key legal entities belonging to the group of companies have lost several lawsuits worth more than 1 billion hryvnia.

These decisions are the result of a corporate dispute that has been going on since spring 2020. On the other hand, throughout its existence, Citrus has been a frequent figure in news about smuggling; gray schemes and tax evasion are possible.

Citrus is a well-known electronics retailer dating back to the 2000s. In 2007, an online store of the same name was launched. As of 2024, the network has 71 physical points of sale and is the official supplier of Apple and Xiaomi equipment to Ukraine.

But behind these dry statistics lies a rather complex management system, which consists of the constant registration of new legal entities that manage various types of activities - from importing to leasing.

The main company that unites the Citrus group now is the Joint Stock Company “Stuart Closed Non-Diversified Venture Corporate Investment Fund”, the beneficiary of which is one of the founders of the network, Grigory Topal. Stuart was created only in 2020, and before that Citrus was scattered among a dozen companies mired in legal red tape.

Grigory Topal’s primary business partner was Dmitry Zinchenko. In one of his interviews, the latter confirmed that Citrus is a tangle of different legal entities.

In 2021, Zinchenko, due to a conflict with Topal, sold his 50% stake in the ZT-Invest company to businessman Gennady Korban. It was this company that owned the rights to the Citrus brand and others included in the group. Topal claims that the agreement took place illegally and the courts on this matter continue to this day.

According to register data, ZT-Invest owned the rights to the Citrus trademark from 2013 to 2022. She owns the right to TM Citrus until December 2026.

On the Citrus website you can find a message that ZT-Invest, like Tsetrading and Gadget Trading, are not and have never been part of the closed non-diversified venture corporate investment fund Stuart, a joint stock company. unites the Citrus group of companies. But the same ZT-Invest, for example, was created in 2004 by Grigory Topal and Dmitry Zinchenko, which at least confirms that the company is directly related to Citrus.

For the period 2019-2021, the main company conducting commercial activities of Citrus was Smart Gadget LLC. Now the basis of the business is Tsetekhno LLC. Both firms are involved in a tax evasion judgment.

During the investigation, it was possible to find out that during July-October 2019 alone, Smart Gadget evaded paying taxes in the amount of almost 13.4 million hryvnia. Moreover, tax officials immediately discovered a number of companies involved in the evasion scheme, whose tax invoices were registered from the same IP address. Namely: Tsetehno LLC, Smart Gadget LLC, Gadget Trading LLC, Tsetehrading LLC.

“During 2019, Smart Gadget LLC has been importing mobile phones and electronic equipment at reduced prices and concealing the real quantity and cost of imported goods from regulatory authorities by falsifying documents necessary for customs clearance with subsequent sale in the Citrus network of stores and websites. Subsequently, imported products are sold to controlled enterprises, namely Tsetehno LLC, Gadget Trading LLC, Tsetrading LLC, which in turn document the sales to controlled individual entrepreneurs in the amount of 60 people who are on the simplified system taxation, at a price that is several times less than the real cost of goods sold, which makes it possible to hide the real volumes of profit,” the court document says.

It is separately noted that the mentioned 60 controlled individual entrepreneurs submit tax reports from one IP address, like “Tsetekhno”, “Smart Gadget”, “Gadget Trading” and “Tsetrading”.

Based on the above information, we can clearly conclude that all the mentioned companies are a chain of the same Citrus group. And even if the official website says that this is not so, in essence it is just a hoax.

Journalist Evgeny Plinsky spoke about the fact that Citrus sells equipment through individual entrepreneurs, thereby trying to evade taxes. In particular, he conducted an experiment: he bought a mobile phone online and did not see a fiscal receipt in the documents received from the courier, but instead a printout from an individual entrepreneur. Which is a direct violation of tax laws.

In December 2019, according to the publication Censor.net, the production of goods traded by Citrus through 60 controlled individual entrepreneurs was closed. But sources said that the State Bureau of Investigation has become interested in the case, albeit slowly, but is “investigating how the closure was achieved through corrupt connections.”

During the period when Citrus is divided by Grigory Topal and Gennady Korban, the situation is further aggravated by the fact that the companies controlled by the former began to lose lawsuits for crazy sums. Thus, only in May 2024 two court decisions appeared.

In one of them, on the proposal of Gadget Trading (controlled by Korban - Ed.), the court decided to recover from Tsetechno (controlled by Topal - Ed.) a debt amount of 981 million hryvnia. Of these, 587 million is the debt itself, 318 million is due to inflation and 75 million is accrued interest per annum.

Another court decision, made in the spring of 2024, refers to the recovery of 400 million hryvnia from the Stuart Fund in favor of the same Gadget Trading. It should be recalled that it is the Stuart Foundation that Grigory Topal calls the main company managing Citrus.

In total, these two decisions alone oblige Topal's companies to pay about 1.3 billion hryvnia in debt.

And this despite the fact that the Gadget Trading company is in bankruptcy. She is being investigated by the Bureau of Economic Security within the framework of proceedings No. 72024101400000002 on grounds of tax evasion on a particularly large scale. We are talking about 575 million hryvnia.

All these manipulations with the registration and re-registration of companies, which Citrus has been conducting since the beginning of its existence, cannot but arouse suspicion from the tax authorities. And additional evidence that, in addition to controlled companies, Citrus is also playing with individual entrepreneurs, adds up to one puzzle - tax evasion on a large scale.

But if Citrus goes bankrupt as a result of accumulating debts, then it is unclear who will be responsible for the tax millions underpaid to the budget of Ukraine.