Prosecutors said a pre-trial investigation is underway into large-scale embezzlement of budget funds in defense procurement, money laundering, and the creation and participation in a criminal organization.
According to investigators, the private company signed several government contracts to supply mortar mines to the Ukrainian military. However, part of the delivered ammunition was found to be unfit and dangerous, while advance payments under other contracts were allegedly misappropriated.
Preliminary state losses are estimated at nearly ₴3 billion (about $79 million), including more than ₴2.4 billion (about $63 million) from the possible embezzlement of advance payments and ₴571 million (about $15 million) from the supply of defective mines, the Prosecutor General’s Office said.
Investigators established that a subcontractor received more than ₴120 million (about $3.2 million) in advance payments for work that had not actually been carried out, while the main supplier raised no claims. Court experts confirmed that the mines did not meet technical specifications, contained insufficient explosive material, and showed failures in detonation initiation.
Prosecutors stressed that they are separately examining the use of advance funds to purchase equipment unrelated to the contracts, which was later transferred to another company — actions classified as money laundering of criminal proceeds.
So far, ten individuals have been formally charged, four of whom have been detained. The suspects include representatives of the supplier, company management, accounting staff, the head of the subcontractor, and officials from military acceptance offices.
Law enforcement agencies are preparing motions to place the suspects in custody with bail amounts ranging from ₴100 million to ₴500 million (about $2.6–13.2 million). Measures are also underway to identify all involved parties, assess the role of officials responsible for quality control, and ensure compensation for state losses.