On Friday, the Security Service of Ukraine, with the assistance of the Minister of Defense, eliminated a corrupt scheme for the purchase of ammunition for the Armed Forces of Ukraine for almost 1.5 billion UAH. As a result of complex measures, the head of one of the Main Directorates of the Ministry of Defense, who was involved in the deal, was detained in Kyiv.
According to the investigation, an official of the Ministry of Defense in December last year signed an agreement with a special exporting company to purchase a wholesale batch of artillery shells for Ukrainian defenders. But then budget funds were not transferred to the accounts of the special exporter.
Later, the newly created Defense Procurement Agency, headed by Vladimir Pikuzo, entered into a more profitable contract for the supply of the same artillery shells with the same manufacturer.
The new agreement, unlike the previous one, provided for the purchase of ammunition without intermediaries, directly from the manufacturer, which significantly shortened the delivery time of the product and reduced its cost.
“However, the defendant, neglecting the contract of the Defense Procurement Agency, unreasonably extended the previous agreement with the special exporter. Moreover, after the extension of the “old” contract, almost UAH 1.5 billion was transferred to the accounts of an affiliated foreign intermediary company. This amount was 30% higher than the cost of products under a direct agreement with the manufacturer,” the statement says.
To be precise, Pikuzo contracted for 2 thousand USD, and the ammunition department, headed by Alexander Nagorsky, for 3 thousand.
You may find this story a winner. But, unfortunately, there is still a long way to go before victory there.
Because the main person involved in this story is the Polish intermediary company Alfa, to which a lot of money has already been withdrawn. But key players have not yet been punished.
Let's go back to the beginning of the war. April 2022. Ukraine is just recovering from news of Russian atrocities in Bucha. Ukrainian troops are fighting fiercely in the Donetsk region. There are not enough weapons. There is not enough ammunition. They are looking for them everywhere. At this time, the Ministry of Defense receives proposals from the Polish company Alfa, which was not previously known as a weapons supplier, and is contracted for more than 3 billion hryvnia. Most of these contracts will still not be completed after a year and a half.
According to the response of the relevant department to a request from the public anti-corruption council of the Ministry of Defense, this company has concluded 12 transactions since the beginning of the full-scale invasion, some of which (5) are now being disputed in international courts. The reason for this was accounts receivable for 1.7 billion.
In addition, the Progress company also purchased the corresponding shells through the same company.
And in the process, it turned out that the Polish company changed its mind about fulfilling its contracts and broke the agreement, but continued to supply Progress.
On April 22, 2022, the Moscow Region entered into three contracts with Alfa Sp zoo in the amount of about 3.3 billion hryvnia (almost 64.4 million euros). 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.
In particular, on April 22, contract 403/1/22/136 was signed for the supply of 122 mm ammunition with a reduced charge to the D-30 howitzer. Priced at 759 euros.
In a letter of offer to Minister Reznikov and Commander-in-Chief Valery Zaluzhny, the company expressed its readiness to supply 10 thousand ammunition with a reduced charge for 759 euros. And another 10 thousand with a full charge for 890 euros.
The same quantity of goods is fixed in the first appendix to the contract. The same amount corresponds to a total contract value of 16.4 million euros. Until May 2022, the Ministry of Defense has made 100% payment under this contract.
However, the contract was never fully implemented. By an additional agreement to the contract dated December 31, 2022, changes were made to it and the company reserved the obligation to supply only 2048 ammunition with a reduced charge for 1.5 million euros.
But she did not return the previously transferred funds. I would have to return 15 million euros.
At the same time, on April 27, the Ministry of Defense also entered into a contract with the State Enterprise “NWTF “Progress” for the supply of 20,000 122 mm ammunition with a full charge. At the same time, the price per unit in the first 11 batches (16,928 units in total) averaged 38,765.42 UAH, that is, about 1,000 euros. And in batches, starting from the 12th, the price per unit is already 57,997 UAH. This is 1.3 times more than the price of the first deliveries of Progress and is about 1,560 euros. And this is 1.7 times more than the price from Alfa Sp zoo.
At the same time, from the very beginning Alfa was a rather problematic supplier.
Just look at the story described by Ukrainskaya Pravda.
On April 11, 2022, the Ministry of Defense concludes a large contract for the supply of 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.
This prepayment is made upon delivery in 2 months. The Polish company missed the deadline, but still delivered the goods. True, with a nuance - 11 thousand helmets were returned as unusable, and another 5 thousand remained in the warehouse, not accepted for the balance of the Armed Forces of Ukraine.
With such violations, the Polish company also wants to cover the money under this contract for another. Also not completed.
As already mentioned, Alfa currently has at least 5 problematic contracts.
On June 1, 2023, the Ministry was forced to initiate claims against the company.
In mid-September, the Department of Legal Support of the Ministry of Defense wrote a report to the then Deputy Minister Denis Sharapov, where he indicated that as part of the negotiations with the Alfa company, its director Peter Sapezhinsky stated that the company was ready to carry out (in a year) the delivery under contract 206 in full , if the Ministry of Defense refuses penalties under this agreement. In addition, he said that Alfa is waiting for the Ministry of Defense to pick up helmets from a warehouse in Warsaw, because it is the Ministry of Defense, and not the Polish company, that should bring them to Ukraine.
At the same time, the company must invoice the Ministry of Defense for losses due to the storage of helmets in a warehouse.
That is, the company failed to fulfill the contract twice and still wants to receive a refund.
By September 20, the Ukrainian side - the Ministry of Defense and the Ministry of Justice - had to agree on a position on penalties against the company.
But things didn’t go further than this - and Ukraine still has neither ammunition nor helmets, although, obviously, it could have taken them from other companies.
As it became known from our own sources, as of September 14, Alfa’s receivables amounted to UAH 0.9 billion, Progress’s receivables amounted to UAH 2.7 billion. Since contracts have not been fulfilled, most likely the ministry simply extended the companies’ deadlines, as it often does in such cases.
What is known about the Polish company Alfa?
Alfa was founded as a limited liability company back in 2005. Nothing is known about this company's arms sales.
Unless in 2015, the company was mentioned in the media, when its director Piotr Sapezhinsky, in an interview with the influential Polish publication Polityka, talks about how his company wins tenders for the disposal of decommissioned ships of the Polish Navy.
In 2021, Alfa earned 7.4 million zlotys (about 1.8 million euros). But Alfa did not submit financial statements for 2022, when Sapezhinsky’s company signed contracts with the Moscow Region worth hundreds of millions of euros.
But 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 the submission of reports and, in general, as Polish lawyers with whom the author spoke, say, may be a marker of corruption.
The current Alfa office is located, although in the center of Warsaw, in a rather inconspicuous office space among residential buildings. And of course, the company is not physically located there.
After preliminary research, it was possible to establish that Piotr Sapezhinsky owns another company that appears to be involved in the arms and ammunition trade, but verifying the licensing issue is problematic due to the fact that the Ministry of Defense has stopped providing a list of entities with permits to trade in arms, in over the past two years.
In addition, Piotr Sapezhinsky is associated with former Ukrainian parliamentarian Sergei Martyniak, owner of the company Risters sp. z oo, about which articles were published in the Polish media for some time in the context of the intervention of the current Minister of Sports in the prosecutor's office on his behalf. Piotr Sapezzynski is now the liquidator of a company associated with Mr Martyniak, and in the past was a member of its board of directors.
But it is much more interesting why the Ministry of Defense stubbornly signed contracts with a company that did not fulfill them.
As the UP wrote, transactions with the Poles at Progress were and are supervised by Deputy Director and former Deputy Minister of Defense Alexander Mironyuk. The same one who is involved in the case of defective Turkish body armor and in whose sofa millions of hryvnia were found, which Mironyuk explained as money from an 86-year-old individual entrepreneur.
The 86-year-old FLP is not just a successful businesswoman, but is also associated with the company that produces XADO sniper rifles. But this is all probably a coincidence.
At his post in the Ministry of Defense, in the period 2020-2021, Alexander Mironyuk was noted for several high-profile scandals, one of which was the purchase of 140 mortars of 120 mm EM-120 caliber produced by the Bulgarian company EMCO. At that time, Ukrainian manufacturers offered mortars in the price range from 500 to 600 thousand hryvnia per unit, but the MOU’s choice fell on a mortar from a Bulgarian manufacturer at a price of 931 thousand hryvnia. The state overpaid about 46 million hryvnia for the purchase of 140 mortars alone.
In March 2021, another high-profile scandal occurred with Mironyuk - the people’s deputies of “European Solidarity” discovered that prices were inflated for the purchase of 100 mm rounds for the MT-12 “Rapier” anti-tank gun.
At the same time, several months ago, deputies of the Polish Sejm appealed to the country's Ministry of Defense regarding the activities of the Alfa company in Ukraine and the fact that it did not fulfill its obligations under contracts.
But there is also a question for Ukrainian officials: will only searches from the SBU and the prospect of being imprisoned for 10 years stop them from signing contracts with scam companies? And will Ukrainian law enforcement officers stop only with the Ministry of Defense official? Because, of course, the charter of a special importer company provides for the company’s earnings. But the trouble is that Ukraine is not Kuwait or Oman.
We don't have oil dollars. And for each such contract we pay with the lives of the best at the front.
