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Tender kings and their corruption schemes

Author : Olena Holubeva

19:01, 16 October 2017
Tender kings and their corruption schemes

Author : Olena Holubeva

High officials of the Defense Ministry were detained on suspicion of the corruption and infliction of harm to the state in the especially big amount by NABU on October 11. 'Trade Commodity' is involved in the case as the tender favorite of the Defense Ministry and it is connected with Andry Adamovsky. We researched all there is to know about the 'Trade Commodity' and where the corruption traces lead.

19:01, 16 October 2017

Andriy Adamovsky, connected with LLC Trade Commodity according to media
Open source

One of the involvant of the great exposure of the corruption scheme by the National Anti-Corruption Bureau of Ukraine (NABU) and Specialized Anti-Corruption Prosecutor's Office (SAP) is 'Trade Commodity' company. Officially this information was not confirmed by Head of SAP Nazar Kholodnytsky but a few MPs and the number of experts pointed that the issue is about the company connected with Andry Adamovsky. The company itself confirmed this by the release. 'Trade Commodity' is a very interesting player at the fuel supply market and it is necessary to talk about it in the details.

Related: Corrupt deputy defence minister sent to house arrest

The key points of the corruption scheme

According to the NABU, the Ministry of Defense of Ukraine announced a certain company to be a winner of the competitive tendering on the purchase of the fuel oil in 14 lots on April 26, 2016. The Defense Ministry and this company signed 14 agreements on the supply of the fuel for the special purposed equipment in the sum of more than 37.7 million dollars on May 13 and May 18, 2016. According to the pretrial investigation, the Defense Ministry and company-winner signed a number of the additional agreements in June-August 2016 without any legal basis for the amending of the agreements on the purchase of the goods for the budget funds. The additional agreements provide the increase of the price per unit for 16% from the starting price. The company-supplier supplied 8.500 tons of fuel less than it was supposed for 37.7 million dollars due to the additional agreements. According to Nazar Kholodnytsky, the supplier argued the reconsideration of the agreement by the price fluctuations in the market and the fuel became more expensive at that moment and due to this the sides were forced to make the arrangements according to the existing prices. The SAP got the conclusion of the expert study says that there were no essential fluctuations at the market and the amending of the agreements was classified as the corruption by the prosecutors. This corruption inflicted harm in the sum of 5.6 million of dollars. The case was investigated almost a year and it went public on October 11, the involved officials were detained.

The winner of the tender for the supply of 66 000 tons of the fuel for the Defense Ministry in 2016 was 'Trade Commodity' as MP Igor Lutsenko reported at the blog in Ukrainian Truth. The sides signed the agreement on 13-18 May and this company provided the lowest price. However, the price increased by 12-17% after a while. The legislation that regulates the state purchase at Prozzoro provides the price increase through the negotiations. Lutsenko reported that he appealed to the Defense Ministry of Ukraine with the MP's appeal and got the letter with the sign of Defense Minister Stepan Poltorak. The answer provided that the prices contracted with 'Trade Commodity' were increased due to the growth of the prices of the oil-products market, also, it was noted that the company supplied the petroleum made in Belarus, Lithuania and Azerbaijan.

Related: Ukraine’s corrupt deputy defense minister has three cases opened against him in Russia

Lutsenko reported that he used a statistics of the 'A-95' consulting agency after the answer from the Defense Ministry and made a conclusion on its basis that the prices decreased during the summer but not increased. According to the schedule published by the MP, the average market price, particularly for the diesel gas oil was 0.6 dollar per liter in April and it maximally increased up to 0.7 dollar per liter on June 13 and then began to decrease again. At the same time, the price in the agreement of the Defense Ministry was higher than the average market price: it was increased from 0.6 to 0.74 dollar per liter. According to the letter, 'Trade Commodity' also sold A-91 gasoline and jet kerosene for the TS-1, RT and Jet A-1 reaction engines to the Defense Ministry. Igor Lutsenko reported that he appealed to the NABU with a request to check the legality of the increase of the fuel price in the agreements along with the specialists from the Defense Ministry.

According to director 'A-95' consulting agency Sergy Kuyun, ''Trade Commodity' was a newcomer of the tenders and the tender of the Defense Ministry became the first great winner for the company. Kuyun claimed that he and one of the TOP-managers of 'Ukrgazbydobuvaniia' Nellia Stelmach examined the tender and came to the conclusion that army overpaid 3.77 million dollars for fuel. 'The scheme was simple: they won tender, they increased the prices following the world prices and forgot to decrease them following the world prices. They signed 30 additional agreements on the price increase and quality changes that were not published at the 'Visnyk Derzhzakupivel'', Kuyun wrote. 

Related: Anti-Corruption Bureau reports another two suspects of embezzling

'Trade Commodity' emphasized in the release for the mass media that the company strongly disagrees with the NABU accusations and it is ready to conduce the search for truth in this case. It also added that their activity is not connected and not affiliated with any politicians or political powers as some mass media noted.

Everything about 'Trade Commodity'

'Trade Commodity' as a big fuel supplier was unknown until 2016. At this time the company began to get the triumphal wins in the tenders of the big state companies one by one. 'Trade Commodity' got the state agreements for the fuel supply in the sum of 264-377 million dollars since 2016.

Particularly, the Defense Ministry signed the agreements for the supply of 20 325 tons of the non-freezing diesel gas oil with 'Gaztrade' that is connected with 'Trade Commodity' as Enkorr reported. Earlier the ministry bought the non-freezing diesel in Lithuania and Belarus.

Related: Corruption dirt in Ukraine's Ministry of Defense: Two senior officials detained

Moreover, 'Trade Commodity' was recognized as the winner at the trades of 'Ukrzaliznytsia'. It won three lots of 30 000 tons of fuel and offered the prices 871 dollars per ton, 874 dollars per liter and 878 dollars per liter. Also, 'Aviatrade' and 'Element Nafta' companies won at this emergency tender that was held to keep the national security of the country. The state monopolist signed the agreement with the suppliers in the total amount of 60 000 tons of the diesel gas oil. The 'Aviatrade' and 'Element Nafta' companies observed the agreement and did not increase the prices despite the fast growth o the prices for the diesel gas oil in September. They supplied less than 10 000 tons of the diesel oil and claimed that it is necessary to increase the price or they will stop to supply the diesel oil. The tender committee of the 'Ukrzaliznytsia' was forced to annul the lot.

Earlier 'Trade Commodity' signed two more agreement for the supply of 75 000 tons of diesel gas oil in the sum of 62.78 million dollars and 50 000 tons of the diesel gas oil in the sum of 42 million dollars as the mass media reported. Also, the 'Trade Commodity' won the annual contract for the supply of the fuel to the 'Boryspil' Airport.

Related: EU demands from Ukraine to create detached Anti-corruption court

Ukrainian Truth reported citing the data of Prozorro that the 'Trade Commodity' won in the tenders for the supply of the fuel for such big state companies as 'Energoatom', 'Centerenergo'. Moreover, the company supplied the fuel to such big seaports as Mariupol, Berdiansk and Bilgorod-Dnistrovsky seaports.

The role of the president's entourage

According to 'Nashi Groshi', the authorized capital of the 'Trade Commodity' is 277 dollars. The company is owned by some Vadym Maiko from Kamianske, Dnipropetrovsk region. The mass media confirmed that he lives in a common block of flats and he does not own a car.

At the same time, Minister of Transport and Infrastructure Volodymyr Omelyan reported to RBK-Ukraine that 'Trade Commodity' is a company connected to private enterpriser Andry Adamovsky. The excessive influence of Adamovsky on the 'Ukrzaliznytsia' was connected with the issue of the critically low reservoir of the diesel gas oil at the departments of the state monopolist. Enkorr cited Head of State Reserve Vadym Mosiichuk and reported that Adamovsky held the negotiations on behalf of 'Trade Commodity'.

Related: Business ombudsman: Ukraine catches corrupted people, but does not bring cases to the end

The issue is about the scandal that took place in 2016 when the State Reserve and 'Trade Commodity' signed the agreement on the supply of the combustive and lubricating materials. When the company began the supplies it turned out that the product does not correspond to the proper level of the quality. The State Reserve refused to accept such materials and Adamovsky came to Head of State Reserve Mosiichuk and began to persuade him and then to threaten him. 'He introduced as almost the owner of the company. When we started to negotiate we got to know that he is the ultimate owner', Mosiichuk specified.

MP Sergy Leshchenko noted that the representatives of the Ministry of Economic Growth headed by Stepan Kubiv began the official investigation, checks and opened criminal proceedings against Mosiichuk.

Adamovsky confirmed in the beginning of the year that he finances 'Trade Commodity'. The businessman noted at 'Nashi groshi with Denys Bigus' that he really connected with 'Trade Commodity' but he is not an owner of it. 'I am not a shareholder of the 'Trade Commodity'. I only have the financial relationship with this company. And there is nothing more', he said.

Related: Poroshenko stands for international audit of anti-corruption policy of Ukraine

The journalists' investigations claim about the connection of this company and Oleksander Granovsky who is from the entourage of the Ukrainian president. One of the Adamovsky's offices is placed at the 'Eurasia' business center and it is next to the office of MP Oleksander Granovsky. Granovsky is also a close friend and partner of MP Igor Kononenko that is the army comrade of the president. The mass media write about them as about the tandem where one of them works with the courts and law enforcement and the second works with the state companies.

Granovsky denied his relation to the 'Trade Commodity. He claimed to the Ukrainian Truth that there is no connection between him and the company and he can comment on the NASA work or Veterinary Service of Belarus with the same success. However, he noted that he had partnership relation with Adamovsky in 2014.

Related: Energy sector remains most corrupted in Ukraine’s economy, - Anti-Corruption Bureau

Adamovsky and Adamovsky were involved in the great scandal about the shopping mall Skymall after the Maidan. They were accused that they deprived the legal owner of the shopping mall, Estonian Khillar Teder of his rights on it. Later Tedet appealed to President Poroshenko with a request to influence the situation but Skymall became on the books of 'Pivdenny' Bank owned by businessman Yuri Rodin who is a friend of Adamovsky. The accounts of the 'Trade Commodity' are opened in this bank. The issue of the Skymall is still under the consideration of the court.

Also, Adamovsky is mentioned as the co-owner of the 'VikOil' gasoline stations network that was sold to the Russian fuel giant 'TNK' company. Granovsky was his partner. According to Liga.net, Granovsky held the business with the officials from the team of Viktor Yanukovych, former Minister of Agropolicy Mykola Prysiazhnyuk and former Minister of Ecology Vasyl Jarta.

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