Prosecutors say arrested bank funds match amount of likely damages in ArcelorMittal case
The amount of money seized from bank accounts of ArcelorMittal Kryvyi Rih, Ukraine’s largest integrated steel company, is within the size of likely damages to the state, the Prosecutor General Office of Ukraine told the Interfax-Ukraine news agency on Jan.6.
A motion filed by a prosecutor to seize non-cash funds in separate bank accounts of ArcelorMittal concerns only funds recognized as material evidence in criminal proceedings, the prosecutor’s office said.
“According to the materials of the criminal case, it is established that no deductions were made from these accounts for the payment of taxes, fees and other obligatory payments, as well as for the payment of wages,” the office said.
As part of the above proceedings, the company’s incumbent financial director, who is also the chief accountant, in November 2021 was served with charge papers of forgery and deliberate large-scale tax evasion.
“According to the investigation, the suspect deliberately entered false information in the declaration on rent payment for the use of subsoil for the extraction of minerals from iron ore deposits, thereby avoiding paying rent to the budget worth over UAH 2.24 billion ($81.6 million),” the Prosecutor’s General Office said.
“Criminal actions and the relevant amount of damage to the state have been confirmed by the findings of a comprehensive forensic examination,” it said.
The office said the prosecutor had filed the motion to arrest the company’s bank accounts in order to compensate for damage caused to the state budget.
Prosecutors said all procedural actions were taking place within the framework of the current legislation and criminal proceedings.
PJSC ArcelorMittal Kryvyi Rih announced on Jan. 5 that the company’s bank accounts had been blocked on Jan. 4.
The accounts were blocked after representatives of the Office of the Prosecutor General appealed to Ukrainian banks with the requirement to comply with the court decisions taken on Nov. 30 to block the company’s accounts as part of a probe into rental payments.
In September the State environmental inspection of Ukraine imposed a UAH 450 million ($16.4 million) fine on ArcelorMittal Kryvyi Rih for causing environmental damage. The company claimed it would not pay the fine and would appeal in the courts.
Earlier in 2019, the SBU security service initiated criminal proceedings against ArcelorMittal Kryvyi Rih under Article 441 (ecocide) of the Criminal Code of Ukraine after President Volodymyr Zelensky had criticized the company for failing to fulfil its obligations to improve the environmental situation in the city of Kryvyi Rih.
The Large Taxpayers Office of the State Fiscal Service of Ukraine in 2019 carried out an audit of ArcelorMittal Kryvyi Rih and increased the company’s tax liabilities by UAH 7.9 billion ($287.7 million), in particular with regard to rent payments for subsoil use.
The company appealed against additional charges to the State Fiscal Service of Ukraine and they were partially canceled. At the same time, another part of the additional charges is being challenged in court.
SBU chief Ivan Bakanov said ArcelorMittal Kryvyi Rih receives more from the state budget than it pays in taxes to it. The company denies this.
ArcelorMittal Kryvyi Rih is the largest manufacturer of rolled steel in Ukraine. Mittal Steel Corporation acquired 93.02 per cent of the company’s shares on Oct. 24, 2005.
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