20:56 10.01.2018

Al Jazeera publishes Kramatorsk City Court's secret verdict on special confiscation

3 min read
Al Jazeera publishes Kramatorsk City Court's secret verdict on special confiscation

Al Jazeera has published a 95-page text of the verdict of the Kramatorsk City Court dated March 28, 2017, which was later classified as containing a state secret, as the third installment of this week's series of publications on special confiscation in Ukraine.

The court verdict is posted on the TV channel's website both in Ukrainian and in English.

Al Jazeera argues that the verdict reveals the scheme through which public funds were embezzled under fugitive ex-president Viktor Yanukovych, and asks why the court verdict was classified.

In addition, the channel notes with reference to lawyers and anti-corruption groups that the passing of such a verdict behind closed doors and without the participation of non-resident companies provides these companies with strong arguments to seek return of part of or all of $1.5 billion that fell under special confiscation.

The channel also reiterates that transactions for the purchase of government bonds, which fell under special confiscation, were brokered by the Investment Capital Ukraine (ICU) group, which has close links with the current government having advised Ukraine's President Petro Poroshenko. At the same time, the material contains the group's comments that in these transactions its role was limited to that of an agent.

Asked by Interfax-Ukraine, ICU noted the matter concerns services to support transactions on the sale and purchase of government domestic loan bonds between Oschadbank and non-resident companies in November-December 2013, while Al Jazeera wrote about the period between 2012 and 2014.

The investment group explained earlier banks and other market participants could carry out such transactions directly, but the new wording of the law on the depository system from October 2013 obliged market participants to formalize all deals on the sale and purchase of government domestic loan bonds through PJSC Settlement Center and licensed brokers.

"It was not unusual that ICU acted as a broker in the deal with government securities, being the leader in this market," the group believes.

The group added that before signing contracts for brokerage, they conducted an obligatory identification and financial monitoring procedure in relation to the buyers of securities, who were the clients of state-controlled Oschadbank.

"The price, at which the companies bought government domestic loan bonds, was agreed directly without the participation of ICU. The investment group did not open any accounts for these companies and had not worked with them earlier. The role of ICU in these transactions was limited to the function of an agent," the group said.

ICU noted that the National Commission on Securities and the Stock Market within the investigation conducted an unscheduled inspection of the company and audited the mentioned transactions and found no violations. In addition, to protect its reputation, the group initiated an independent verification of its operations by a group of experts who previously worked with the State Financial Monitoring Service of Ukraine and the OSCE, which also confirmed compliance with the legislation, ICU added.

As reported, the companies affected by special confiscation contested not only the very special confiscation, but also the decision to make a secret out of the court verdict. In particular, Akemi Management Ltd in Kyiv's Solomiansky District Court succeeded in the lawsuit against the state expert on the secrets of the Prosecutor General's Office, the prosecutor general about the cancellation of the decision dated June 3 on the availability of statements containing state secrets in the verdict (which also has the label "secretly"). On December 19, the court by its ruling demanded explanations and/or evidence from the state expert about the circumstances of making the decision to declare this conclusion "secret."

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