Zorya-Mashproekt management accused of embezzling $71.6 million
3 April 2025 13:24
A high-profile case of embezzlement of USD 71.6 million by the management of the state-owned enterprise NPKG Zorya-Mashproekt has been sent to court. The investigation found that the officials organized a scheme for illegal export of products, causing huge losses to the state. This was reported by "Komersant Ukrainian" with reference to the NABU.
How did the embezzlement scheme work?
According to the investigation, in 2013-2018, the management of Zorya-Mashproekt developed a plan to withdraw funds abroad. They entered into a series of fictitious agency agreements with a foreign company that was supposed to look for buyers for the company’s products and negotiate contracts. In fact, no real services were provided, and the agreements were just a cover for financial fraud.
Over the course of five years, USD 71.6 million was unjustifiably transferred to the accounts of the non-resident company . THE FUNDS WERE TRANSFERRED TO THE ACCOUNTS OF A NON-RESIDENT COMPANY WITHOUT ANY JUSTIFICATION. Later, these funds were legalized by transferring them to the accounts of other foreign companies controlled by the company’s ex-executives. The scheme made it possible to conceal the origin of the money and remove it from state control.
Evidence and referral of the case to court
on September 26, 2023, the NABU and the SAPO, with the operational support of the Strategic Investigations Department of the National Police, served suspicion notices:
– four former CEOs of SE NPKG Zorya-Mashproekt;
– the head of a non-resident private company.
In March 2024, the pre-trial investigation against the four former officials of the state enterprise was completed.
Charges: Part 5 of Art. 191, Part 1 of Art. 366 of the Criminal Code of Ukraine. The ex-director of the state-owned enterprise and the head of a non-resident private company are also charged under Part 3 of Article 209 of the Criminal Code of Ukraine. Another ex-director of the SOE is charged with Part 2 of Article 209 of the Criminal Code of Ukraine.
The materials concerning the head of the non-resident private company and other allegedly involved persons have been separated into separate proceedings.
During the investigation, in order to obtain evidence of the illegal activities of the scheme participants, the NABU and the SAPO sent requests for international legal assistance to more than 20 foreign jurisdictions. Thanks to the information received from the Indian authorities, it was possible to confirm the fact of fictitious services, and information from Switzerland and Latvia allowed to trace the laundering of funds illegally received from the state enterprise by two of its former officials: 795 thousand dollars. USD and over 222 thousand euros and 275 thousand USD, respectively. USD respectively. International cooperation in the proceedings is ongoing.
The fact that the state suffered losses in the amount of USD 71.6 million was confirmed by the conclusion of a forensic economic examination. Based on the collected evidence, the criminal proceedings were referred to court.
The management of the SOE faces criminal liability for large-scale financial fraud. If proven guilty, the officials could face years in prison and confiscation of property.
Why is it important?
SE NPKG Zarya-Mashproekt is a strategic enterprise of Ukraine that specializes in the production of gas turbine engines for the energy and fleet sectors. The embezzlement of such a sum not only undermined its financial stability but also hit the state budget.
Bringing the case to court is a step towards bringing the perpetrators to justice and recovering the stolen funds.
