Court arrests former deputy defense minister amid procurement scandal

2 February, 07:35 PM
Former Deputy Defense Minister suspected of purchasing low-quality equipment for the military (Photo:State Bureau of Investigation)

Former Deputy Defense Minister suspected of purchasing low-quality equipment for the military (Photo:State Bureau of Investigation)

Kyiv's Pechersk Court has arrested former Deputy Defense Minister Vyacheslav Shapovalov for two months, with bail set at UAH 402,600,000 ($11 million), the State Bureau of Investigation reported on Feb. 2.

The day before, the SBI issued a notice of suspicion to the dismissed Deputy Defense Minister, who had been responsible for the logistics of the Armed Forces. According to the investigation, he lobbied for the conclusion of contracts for the supply of food for the military at inflated prices, as well as the purchase of low-quality bulletproof vests, helmets, clothing and other items for the military worth more than UAH 1 billion ($27.2 million).

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The official was aware of the poor quality of these products yet pressured his subordinates into accepting, and organized repeated inspections for armor plates that failed their initial tests, the bureau said.

Shapovalov resigned as the procurement scandal unfolded. Bohdan Khmelnytskyi, the head of the Defense Ministry's procurement department, was also fired. On Feb. 1, Ukrainian news outlet Ukrainska Pravda reported that both had been criminally charged, as was Volodymyr Tereshchenko, a former deputy head of the state enterprise Promoboronexport, who is now the deputy head of the Department for Coordination of Foreign Economic Activity at the Ministry of Defense.

What the food scandal is about

Yuriy Nikolov, the founder of the Nashi Hroshi (Our Money) investigation project, reported, in an article posted by the Ukrainian online newspaper ZN.UA on Jan. 21, that the Ukrainian Defense Ministry was overpaying for food by 2-3 times, compared to prices in Kyiv’s supermarkets.

Nikolov compared some prices for foods in a state contract with a catering company he obtained from "a source within the Armed Forces of Ukraine”, with the prices in Ukraine's Silpo supermarket chain.

Ukraine’s Defense Ministry called the publication "misleading" and “manipulative”. Defense Minister Reznikov called the report an attempt to undermine the public’s confidence in the military authorities.

However, the President's Office announced an inspection of the relevant contracts, followed by a similar promise by the MoD, though it also called for an investigation by Ukraine’s SBU security service into "misinformation that deliberately harms the interests of defense during an extraordinary time.”

The catering company at the heart of the scandal, Activ, also claimed the report had been “deliberate manipulation.”

The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor's Office (SAPO) added that they were also looking into possible procurement corruption, concerning contracts worth UAH 13 billion ($351 million).

As allegations of fraud swirled around the Defense Ministry, Shapovalov resigned.

Reznikov has since admitted to MPs from parliament committees that numerous inaccuracies were indeed found in the contracts, which are now being checked.

Military food contracts for 2023 are not yet in effect.

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