Shadow connections: Kolomoisky’s company steals billions through Ukrenergo?

Officials of NEC Ukrenergo, contrary to the law, from March 7, 2022 to March 16, 2022, sold electricity to United Energy LLC, which is associated with the oligarch Igor Kolomoisky, when it had the status of “default.” Thus, the state suffered damage amounting to UAH 1.4 billion.

This is stated in the results of the audit of Ukrenergo by the State Audit Service.

One of the functions of Ukrenergo is the administration of commercial accounting and settlements in the electricity market. However, according to the audit results, NEK did not provide adequate control over the timeliness of settlements by market participants, as well as the accrual and collection of debt and related sanctions. As a consequence, the formation of receivables, an unreasonable decrease in assets and loss of resources of the state company.

United Energy is an energy trader that is associated with Igor Kolomoisky's Privat group, which supplies electricity to the oligarch's enterprises, including two ferroalloy plants, or resells it at higher prices. The report states that the volume of unaccounted electricity that went to the oligarch's company amounted to 386,217.33 MWh for a total of UAH 1.4 billion. For comparison, this is the amount of electricity produced in 16 days of operation by one nuclear power plant unit with a capacity of 1000 MW.

Representatives of the State Audit Service indicate that Ukrenergo had the opportunity to contact Oschadbank JSC to collect the debt from the United Energy account, but NEC twice (03/09/2022 and 03/11/2022) informed the bank that there was no overdue debt.

“Which allowed United Energy LLC to withdraw UAH 479 million from Oschadbank JSC from a current account with a special regime to another current account of United Energy LLC,” says the audit report.

According to the materials of the register of court decisions, United Energy LLC transferred part of these funds to New Energy Ukraine. In May 2022, NABU began criminal proceedings No. 52022000000000091, within the framework of which the Supreme Anticorruption Court seized UAH 657 million that were in the accounts of New Energy Ukraine.

According to the investigation, representatives of New Energy Ukraine knew that the funds received from United Energy were received as a result of a criminal offense, and that they were transferred to the accounts of New Energy Ukraine for the purpose of legalization. As of the end of March 2023, the management of New Energy Ukraine filed a petition to cancel the seizure of UAH 657 million, but the court rejected it. The investigation into this case continues and NEC Ukrenergo has not yet received its funds back.

This is not the only case where Ukrenergo operates at a loss when doing business with United Energy. Thus, in August 2022, the Supreme Court considered a case regarding a debt of UAH 117.6 million. Then a company associated with Kolomoisky received electricity from Ukrenergo, and then did not pay for it. NEC went to court and received a decision in its favor, but United Energy appealed it. While the courts are considering disputes between the parties, the money that the state company should receive remains in the accounts of a company associated with Kolomoisky. For Ukrenergo this means a loss and loss of working capital, and for United Energy it is actually an interest-free loan.