Ukraine’s anti-corruption authorities have sent a criminal case to court against two officials from Ukrzaliznytsia, the state railway company. The officials are accused of embezzling nearly $290,000 through a rigged coal procurement tender.
The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) say the two misappropriated 11.8 million hryvnias by overpaying a favored supplier.
Investigators found that a Ukrzaliznytsia branch organized a tender to buy coal for heating passenger trains. The branch’s deputy head, who also led the tender committee, allegedly worked with the head of procurement to ensure a specific company won the contract. Rival companies were blocked from participating by manipulated technical and procedural requirements.
The chosen supplier delivered coal at inflated prices, causing Ukrzaliznytsia to pay far more than necessary. Authorities say the officials then pocketed the extra money.
The fraud was uncovered in October 2021. Under Ukraine’s Constitution, all suspects are presumed innocent until proven guilty in court.
This is not the first time Ukrzaliznytsia has faced corruption allegations related to coal procurement. A 2014 investigation by the Organized Crime and Corruption Reporting Project (OCCRP) exposed how the company and other state entities used corrupt tenders and shell companies to funnel illegally mined coal into Ukraine’s official economy at inflated prices.
In another OCCRP report, Ukrzaliznytsia was linked to Anton Prygodskyy, a former lawmaker and close ally of ousted President Viktor Yanukovych. Companies connected to Prygodskyy reportedly won railway contracts worth hundreds of millions of hryvnias.
That investigation revealed Prygodskyy used offshore companies in Malta to help finance a €13 million ($14.9 million) luxury yacht, possibly avoiding millions in taxes through EU loopholes.
Prygodskyy also co-owned the logistics firm Lemtrans with Ukrainian oligarch Rinat Akhmetov. After the 2014 revolution, authorities investigated suspicious freight car privatizations and money laundering involving Prygodskyy-linked companies. No criminal charges have been filed so far.
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