The arbitration court of Lipetsk region in Russia on June 20 will hear arguments by joint-stock company Lipetsk Confectionary Factory Roshen to strike down the decision of Russia's interdistrict tax inspection service in Lipetsk region demanding the factory pay RUB 48 million to the state budget.

According to materials posted to the Internet by the court, in March 2017 the tax office monitoring large taxpayers in Lipetsk region discovered tax violations. It said Roshen owed RUB 28.66 million in value-added tax payments, RUB 8.3 million in penalties and RUB 11.45 million in other fines.

The court on May 31 found the fines unwarranted and scheduled a hearing on the matter for June 5.

Roshen, meanwhile, filed a court motion requesting to prevent tax authorities from taking any actions involving the factory. Lawyers for the factory argued in the motion that compelling the enterprise to abide by the decisions taken by the tax authorities would be harmful.

The court, however, dismissed the motion, and asked Roshen by June 16 to provide its accounting balance, financial result reports and information about tax payments, liabilities, penalties, fines, as well as other financial documents.

As earlier reported, Roshen Corporation in January 2017 said it would stop production at Lipetsk confectionery factory.

Roshen's factory in Lipetsk, which is part of the Ukrainian Roshen Corporation, posted RUB 4.9 million in net losses for 2016, which was 92.3% less than in 2015.

Roshen Corporation, one of the largest Ukrainian confectionery manufacturers. It incorporates Kyiv, Mariupol (Donetsk region), Kremenchuk (Poltava region) and two Vinnytsia confectionery factories, Dairy Plant Bershadmoloko, and Litynskplemzavod (both based in Vinnytsia region). It also runs confectionary facilities in Klaipeda (Lithuania), Lipetsk (Russia), and BonbonettiChoco (Hungary).

The owner of the corporation is President of Ukraine Petro Poroshenko. During the election campaign he promised to sell Roshen, hiring for that the investment firm Rothschild and Ukrainian investment group Investment Capital Ukraine (ICU). However, due to lack of buyers, the contract was signed in January 2016, in accordance with which Poroshenko gave his share of the corporation to an independent blind trust. The bank managing the trust has a four-year proxy to negotiate the sale of the assets.