Pavlohrad Chemical Plant, a leading fuel and explosives manufacturer, has recently been literally living on a powder keg. The plant's management, which is listed as strategically important to Ukraine's economy and security, is suspected of causing significant damage to both the Ukrainian economy and its security.
On August 11 and 12, military prosecutors conducted searches on the plant's premises and seized all documents related to the sale of the plant's products to economic entities. According to sources, the military prosecutor's office for the Southern region of Ukraine has been investigating criminal case No. 42016160690000050 since July 2 against officials of the Pavlograd Chemical Plant, on charges of offenses under the Criminal Code—specifically, Part 5 of Article 191 (large-scale theft), Part 2 of Article 28 (commission of crimes by prior conspiracy of individuals, an organized group, or a criminal organization), and Part 1 of Article 263 (illegal handling of weapons, ammunition, and explosives).
Translating the volumes of audit reports and figures into plain English, law enforcement agencies suspect that the plant's management engaged in the unauthorized sale of explosives to unlicensed companies from 2013 to 2015. They also suspect that some of these explosives were shipped to territories not controlled by Ukraine.
As often happens, large-scale fraud was uncovered during an investigation into the economic activities of the Pavlohrad Chemical Plant. The investigation was launched because the plant's director, Hero of Ukraine Leonid Shyman, was unable to explain where the money had gone. The Pavlohrad Chemical Plant is under the jurisdiction of the State Space Agency, which is responsible for ensuring that the plant's economic activities are consistent with state interests. In 2015, the new director of the State Space Agency, Lyubomyr Sabadosh, inquired: why, with 100% funding across four areas, was the project completion rate at best 75%, 83%, or 74%? By this time, the US State Department had also accumulated complaints against Shyman, as the plant, which fulfills Ukraine's obligations under the international fuel and ammunition disposal program, persistently ignored the comments and appeals of the American side.
But the Hero of Ukraine never explained why, over the past eight years, not a single project had been completed to 100% completion. Nor did he respond to the complaints of the US State Department, whose representatives came to ask: why have we been funding the program for so many years without seeing any results?
The answers were discovered during an audit of the Physics and Chemical Plant's operations over the past three years, initiated by order of the Head of the State Space Agency, Lubomyr Sabadosh. Excerpts from the extensive audit were compiled in the final report, which was submitted to the fiscal service and law enforcement agencies for parallel data verification. After reviewing the materials, law enforcement officials deemed them compelling grounds for legal action. Even a layman can understand why: by selling products through a number of shell companies, Physics and Chemical Plant incurred a loss of 54,065 million hryvnias to the state.
A pre-trial investigation opened in criminal case No. 42016160690000050 established that officials of the Pavlograd Chemical Plant, abusing their official positions between 2013 and 15, created schemes to supply explosive materials to mining companies through intermediaries unauthorized to buy and sell explosives. As a result, Pavlograd Chemical Plant laundered approximately UAH 35,951 million through Ukrspetskhim, UAH 7,025 million through Ukrspetskhem, and approximately UAH 11,089 million through Zorya Scientific and Production Enterprise LLC. We have not yet been able to find out what Leonid Shyman, director of the Pavlograd Chemical Plant and Hero of Ukraine, thinks about this matter—his phone number is silent, and, according to sources, he has left the country. He will have to explain why, over the past 8 years, neither state programs nor the joint ammunition disposal program with the United States have been implemented, while only the “disposal” of millions of state funds has been successful.
Igor Nikolaev, for ORD
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