16:59 23.09.2016

NABU: Director of Zaporizhia titanium and magnesium combine detained

2 min read
NABU: Director of Zaporizhia titanium and magnesium combine detained

Agents of the National Anti-corruption Bureau of Ukraine (NABU) on Friday detained the director of LLC Zaporizhia titanium and magnesium combine (ZTMC) as part of an investigation on charges of abuse of office by the combine's top managers, which led to large-scale embezzlement.

"Agents of the National Anti-Corruption Bureau of Ukraine under procedural supervision by prosecutors of the Specialized Anti-corruption Prosecutor's Office together with SBU Security Service officers in Zaporizhia region on September 23 detained the director of Zaporizhia titanium and magnesium combine. The detention took place as part of an investigation launched by NABU detectives in June 2016 on charges of abuse of office by ZTMC officials, which has resulted into embezzlement of funds in especially large amounts," the NABUC's press service said.

The detained official will be issued a notice of suspicion of committing a crime under Part 5 of Article 191 of the Criminal Code (misappropriation, embezzlement of property or seizure of assets through abuse of office).

The investigation established that in 2014-2015, a co-owner, Tolexis Trading Limited, allocated UAH 880 million for the modernization of production facilities at ZTMC under an agreement on LLC establishment.

However, as the NABU press service said, the company's director, abusing his official position, embezzled most of the cash acquired (UAH 492 million) by transferring it to third parties. In particular, some funds were transferred to OJSC Holding Company Energomerezhi (Power Networks), OJSC Zaporizhiaoblenergo, OJSC Commercial Bank Nadra, and OOO Syntez Resurs to repay ZTMC's debts to those entities. At the same time, these payments had to be handled by Tolexis Trading Limited on the terms stipulated in the agreement on ZTMC's establishment.

In the case of a conviction by a court, the detainee is facing imprisonment for a term of from seven to 12 years with the seizure of property and deprivation of the right to occupy certain positions or engage in certain activities for up to three years.

LLC ZTMC was created in 2013 by the State Property Fund of Ukraine on behalf of the state (owns 51% of equity capital) and Cyprus-based Tolexis Trading Limited (49%). The latter undertook to pay debts of the state-owned enterprise, the basis of which the LLC was created. The investor was obliged to inject $110 million into the introduction of advanced technology and equipment of domestic and foreign firms.

ZTMC is Europe's only producer of titanium sponge.

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