“Hromadske”: There were 3 straw companies in the contract of the Ministry of Defense for the supply of mines. There are still no ammunition

Anhelina Sheremet

In October 2022, the Ministry of Defense of Ukraine signed a contract with Lviv Arsenal for the purchase of 100 000 mortar mines. The cost of the contract is one billion 380 million hryvnias, or $37.5 million. The state paid almost 100% of the amount in advance. The first mines were supposed to arrive in a month, but this did not happen after six months or a year.

This is stated in the "Hromadkse" investigation.

The actual scheme of the agreement was as follows: Ministry of Defense of Ukraine — "Lviv Arsenal" (Ukraine) — "Sevotech" (Slovakia) — WDG (Croatia) — "Elmech Sintermak" (Croatia).

A few months before the agreement with the Ministry of Defense — in August 2022 — "Lviv Arsenal" signed a contract with the Slovak company "Sevotech". It was "Sevotech" that was supposed to bring 100 000 mines to Ukraine for almost 1.5 billion UAH. "Lviv Arsenal" had only to receive funds from the Ministry and transfer them further, keeping 3% for itself — exactly as much as the government of Ukraine allows.

"Hromadske" writes that "Sevotech" in this contract for 100 000 mines was just a spacer, just like "Lviv Arsenal". That is, she just had to transfer the money to the Croatian company WDG promet, with which "Sevotech" had a contract.

But WDG is actually not a manufacturer either. This company was supposed to buy ammunition for Ukraine at the Croatian "Elmech Sintermak" plant. Thus, in one contract between the Ministry of Defense of Ukraine and a real arms manufacturer there were as many as three spacers, and their task was only to receive funds.

However, to "Hromadske" request, "Elmech" unequivocally replied that it had never received either funds or end-user certificates, either from the state of Ukraine or from any of the mentioned companies.

The final recipient of the funds remains WDG. A lawyer representing the company explained what was happening. In August 2022, the Ukrainian company "Lviv Arsenal" signed a contract with the Slovak company "Sevotech". "Sevotech" then entered into a contract for the supply of these ammunitions with WDG promet. WDG, in turn, agreed with another production company — "Elmech".

"But for some reason ʼLviv Arsenalʼ failed the deal and sent only 10% instead of 50%. WDG — our client — informed ʼSevotechʼ that the agreement was for 50% and that these funds must be paid. Sometime in December 22, ʼSevotechʼ received another 20% subscription. That is, 30% of the contract price came out together, but still not 50%, as was agreed. This was still not enough for ʼElmechʼ and eventually ʼElmechʼ terminated the contract with WDG. And WDG was also obliged to pay a fine," explained the lawyer.

Journalists write that under the contract between "Sevotech" and "Lviv Arsenal" advance payment could be made in part, in the amount of "not less than 35% of the contract price." The money that "Lviv Arsenal" paid to "Sevotech" was exactly 35%. That is, the contracts of all participants in the scheme were simply not agreed among themselves, and this whole structure was unsustainable from the very beginning.

After the "Elmech" plant withdrew from the agreement, he offered the director of "Lviv Arsenal" Yuriy Zbitnev to terminate the contract and return the money. And allegedly it was Zbitnev who insisted on leaving the contract in force and buying from another manufacturer. And then WDG and "Sevotech" decided to buy ammunition for Ukraine not in Croatia, but in Cambodia and Bulgaria. More precisely, they still buy them there, issue licenses and promise that the first mines under the contract are about to arrive in Ukraine. But they are not there yet.