Billions went nowhere: Polish company and their dubious deals with the Armed Forces of Ukraine

April 2022. A little more than a week has passed since the Ukrainian Armed Forces pushed Russian troops away from Kyiv and expelled them from the Kyiv region. But there was no confidence that the invaders would not try to storm the capital again.

The entrances to Kyiv continued to be blocked by concrete slabs and mounds of sand, and at most intersections there were checkpoints with very picky watchers from the military and army.

But the city began to gradually recover from its experience. Shops and cafes were the first to come to life. Kilometer-long traffic jams appeared not at the exit, but at the entrance to Kyiv. Life was literally returning to the capital. But, unfortunately, not only good things returned.

On April 11, 2022, the Ministry of Defense enters into a large contract for the supply of critically needed items at that time: 20 thousand ballistic helmets, 20 thousand body armor and 40 thousand armor plates for them. The transaction amount is 24.5 million euros with 100% prepayment.

It is after this transaction that a certain Polish company “Alfa” will appear in the MOU contracts. Its appearance will mark not the entry into a great international success story, but the saga of one of the top 10 largest debtors of the Ministry of Defense. At the beginning of 2023, Alfa had debts to the Ministry of Education of Ukraine under various contracts of more than three and a half billion hryvnia.

To understand how this happened, it is enough to say that from the above-mentioned batch, Alfa, although with delays, was able to supply all the body armor and plates. But out of the 16 thousand helmets she brought, 11 thousand were immediately returned as unusable, and another 5 thousand remained in the warehouse, not accepted for the balance of the Armed Forces of Ukraine.

And despite the facts of supply disruptions, on October 25, 2022, the Ministry of Defense again orders another 20 thousand helmets and 50 thousand body armor from Alfa worth almost 50 million euros. This time there was no prepayment.

And this is good, because the helmets never arrived in Ukraine, and half of the supplied body armor did not pass ballistic tests.

However, even these two contracts, each of which is larger than a scandalous case with Turkish jackets, look ridiculous in comparison with those agreements for the supply of weapons, which will be discussed below.

As the UP found out, the Polish company received and withdrew billions and billions of hryvnia from Ukraine. But she was unable to realize the delivery of the paid weapons.

What kind of contracts are these and what is the fate of the Ukrainian money, Ukrayinska Pravda found out.

“Golden” April for “Alfa” in the Ministry of Defense

The “love” of the Department of Military-Technical Policy of the Ministry of Education and Science for the Polish company is of an interesting nature. It resembles a wave of clouding of consciousness, when in one moment something is done for which you then reproach yourself for a long time. Until a new wave comes.

Most of the transactions with state arms suppliers, which the UP wrote about in the text about “special marauders,” became public after the Ministry of Defense filed claims in the economic court. The MOU does not challenge contracts with Alfa in Ukrainian courts, because it is a foreign company.

Such cases must be considered in international arbitration and submitted through the representative office of the International Commercial Arbitration Court at the Chamber of Commerce and Industry. But their activities are not published, like the same court register.

However, even despite this, the UP is aware of at least seven agreements in total that the MoU entered into directly with Alfa. Some of them are already being disputed in the aforementioned arbitration.

It is interesting that the agreements were signed in batches when the Ministry of Defense had some “Alpha days”.

The first such day took place on April 22, 2022. Then, in one fell swoop, three agreements worth about 3.3 billion hryvnia (almost 64.4 million euros) were concluded with Alfa. For each of them, the Polish company received 50% of the advance.

It was about the supply of several Gvozdika self-propelled howitzers, 122-mm ammunition for the D-30 howitzer and 122-mm missiles for the Grad.

As far as the UP knows, only a small number of the contracted weapons arrived. Only a tenth of the supplies for the D-30 arrived very late, a third of the missiles for the Grad, and although all of the Gvozdikas arrived, they were in such a condition that they definitely do not correspond to the technical class stated in the agreement, and the Ministry of Defense is now trying extract compensation from the supplier.

As of the beginning of 2023, under three April 2022 agreements, Alfa had almost 1.7 billion hryvnia in receivables to the Municipal Educational Institution. With this money it would be possible, for example, to complete the construction of three Holodomor museums.

But this is not even the most outrageous thing about the agreements with Alfa. Five days after this company signed direct agreements with the Ministry of Defense, that is, on April 27, 2022, the Ministry of Defense concluded three more interesting contracts.

This time the supplier was the state special importer of weapons - the Progress company, which was supposed to supply similar types of ammunition as the Polish company.

The amount of three agreements with the state company reached more than 17 billion hryvnia. The most interesting thing is that, according to the UP, Progress was supposed to buy Bulgarian rounds for the D-30, D-20 and rockets for the Grads through the same Polish company Alfa.

As far as Ukrayinska Pravda knows, transactions with the Poles at Progress were supervised by Deputy Director and former Deputy Minister of Defense Alexander Mironyuk. He is known to UP readers from the scandalous search in a criminal case regarding the purchase of low-quality bulletproof vests, during which Mironyuk was found to have millions of various currencies in his sofa.

That is, in 5 days, the Polish company received various contracts from Ukraine for almost 21 billion hryvnia.

The question may arise: what is the problem if the company supplies both directly and through another company? Answer: in price. The same shells from the same manufacturers in direct transactions with Alfa and in contracts with Progress differed by tens of percent.

For example, a Polish company had to supply 122-mm rounds with a full charge for D-30/2S1 howitzers for 760 euros, and Progress the same rounds for 1,195 euros. 435 euros or plus 57% on one shell, contracted, in fact, from the same company with a difference of five days.

It is not surprising that the Polish contractor fulfilled this contract for Progress much more efficiently than its own for the supply of the same shells, but at 57% cheaper: the Alfa contract was completed by 10%, but Progress had delays, but about 80 % of delivery made.

But even despite such blatant markup specifically under this agreement, the state special importer at the beginning of 2023 had more than 200 million hryvnia in debt to the Ministry of Defense.

June per billion: second day of “Alfa” at the Municipal Educational Institution

At the end of May 2022, the Polish Alfa was supposed to complete the supply of shells under the April contracts. But, as readers have already guessed, it didn’t even come close to this goal.

Therefore, with grief and misfortune, the supplier agreed to extend the delivery period until July 2022.

But on June 13 of the same year, something completely incomprehensible happens. Knowing that the company was violating previous contracts, the Ministry of Defense decided to give the Alfa company several more billion hryvnias of army money.

That day, three more contracts worth about 2.6 billion hryvnia were concluded. The company again received half of this amount as an advance payment.

All three agreements were probably signed on the part of the Ministry of Defense by the head of the department of military-technical policy, Shostak, who will be removed from his post a week later, in June 2022.

This time the contracts provided for the supply of:

• 120 mm mines (more than 11 million euros in advance);
• 152 mm rounds for the Hyacinth howitzer (18 million euros in advance);
• 152 mm rounds for the Dana self-propelled gun (13 million euros prepayment).
• Need I say that all three contracts were broken?

About 40% of shots arrived for “Hyacinth”; 120 mm mines were delivered for less than 1% of the contract; No shots were fired at Dana at all.

Now the Ministry of Education is trying to return 27 million euros in advance payments and collect almost 13 million euros in fines for disrupted deliveries.

But even if this succeeds, a terrible fact will remain unchanged: the Ukrainian army did not receive critical weapons for a year and could not contract them elsewhere because the supplier withdrew the money from the country.

And is the Polish company Alfa capable of returning the advances received?

Where does Alfa begin?

As a company with multimillion-dollar turnover, Alfa is too inconspicuous. True, in the fall of 2022 the company moved to the center of Warsaw, albeit to a not very ostentatious office center.

If you are waiting to see golden letters above the entrance to the company's office, then you are in vain. Everything is limited to a modest inscription and a ban on entry. The company’s website is located on one page; the only interesting thing there is the gratitude from the Chairman of the State Border Guard Service of Ukraine Sergei Deinek.

As follows from extracts from Polish registers, Alfa was founded as a limited liability company back in 2005. This company has especially lacked stars since then.

The only noticeable mention of this company dates back to 2015, when its director Piotr Sapezhinski, in an interview with the influential Polish publication Polityka, told how his company wins tenders for the disposal of decommissioned ships of the Polish Navy.

In general, the company is engaged in trade in various types of products, including military products. In 2020, the company showed 1.23 million zlotys (a little more than 300 thousand euros) in profit; in 2021, Alfa earned 7.4 million zlotys (about 1.8 million euros).

Interestingly, Alfa has not yet filed financial statements for 2022, when Sapezhinsky’s company signed contracts worth hundreds of millions in Ukraine. On the contrary, in the first half of 2023, the company has already changed its information in the registers 4 times, which may be a way to delay filing reports.

But how did an inconspicuous company from Poland become one of the largest suppliers and debtors to the Ministry of Defense during the war?

Who in Ukraine could lobby Alfa and win more and more contracts for it, despite all the obvious warnings?

Where does a modest company get access to the closed world of the Bulgarian defense industry?

“Ukrainian Pravda” will continue to look for answers to all these questions and will try to dot all the i’s in its next publications.