14:23 15.11.2023

Agrobiostandard, which bought Volyntorf from State Property Fund for UAH 254.7 mln, declares corrupt attempt to disrupt privatization

6 min read
Agrobiostandard, which bought Volyntorf from State Property Fund for UAH 254.7 mln, declares corrupt attempt to disrupt privatization

The court, within the framework of criminal proceedings opened by law enforcement officers, blocked the privatization of the entire property complex of the state-owned enterprise (SOE) Volyntorf, for the purchase of which at a tender in the ProZorro system Agrobiostandard LLC (Terebovlia, Ternopil region) paid UAH 254.7 million, the company that bought the SOE accuses the Volynpryrodoresurs municipal company and law enforcement officers of a corrupt attempt to disrupt privatization.

"Today, these corrupt officials receive an illegal benefit of UAH 500,000 every day. That is, every day of delay in privatization is UAH 500,000," Kostiantyn Brovchenko, Agrobiostandard auctioneer and investor, said at a press conference at Interfax-Ukraine.

According to him, after losing at the auction of the State Property Fund (SPF) of Ukraine for the sale of Rivnetorf, despite the proposed price of UAH 200 million, Agrobiostandard became interested in Volyntorf, the sale of which was announced in ProZorro in September. As a result, the company became the only participant in the auction held on October 6, offering UAH 221.2 million at a starting price of UAH 190.2 million. Including VAT, Agrobiostandard paid UAH 254.7 million on November 1, and on November 6 the company entered into a purchase and sale agreement with the regional branch of the State Property Fund in Lviv, Zakarpattia and Volyn regions.

As the company said, at the same time, the State Bureau of Investigation and the prosecutor's office in Kyiv saw this as a "criminal conspiracy" and accused Agrobiostandard and the State Property Fund of understating the price by UAH 100 million, and the Pechersky District Court of Kyiv seized the company.

According to a press release, law enforcement officers opened criminal proceedings two weeks after the announcement of the winning bidder. The decision to recognize SOE Volyntorf as material evidence was issued in four days – on October 23, and the court granted the request for the seizure on October 25.

"To date, the amount of damage to Agrobiostandard LLC is almost UAH 254.7 million and it was caused by the actions of the investigator and the prosecutor, since the company, having paid the entire amount, cannot take ownership of the acquired property," the company said in the press release.

At the press conference, Brovchenko linked the problems that arose with the privatization of Volyntorf with the municipal enterprise Volynpryrodoresurs and its director Anatoliy Kapustiuk. This enterprise was created in 2016 and received four licenses for the extraction of amber and peat in the region, as well as a license for the extraction of copper ores.

According to Brovchenko, thus Volyntorf without the necessary licenses was forced to work with Volynpryrodoresurs on enslaving conditions, selling peat for UAH 2,000, while the market price was UAH 5,000, which per year means a loss of almost UAH 100 million and gives the buyer benefits of about UAH 500,000 per day.

According to the shareholder of Agrobiostandard, Volynpryrodoresurs also planned to purchase Volyntorf, but at a lower price.

Brovchenko said that after the auction, the director of the municipal enterprise Kapustiuk contacted him. "He comes to me with a specific proposal that we close all criminal cases, we are the authors of these criminal cases, we close all your problems, and you give us 50% of your company. That is, they failed to delay privatization, they failed to disrupt privatization. It was not possible to buy for three kopiikas in the third, fourth round. Well, then we create a problem for you and solve it this way," the Agrobiostandard shareholder said.

He said that in connection with the current situation, the company turned for protection to the president of the country, the secretary of the National Security and Defense Council, and the Security Service of Ukraine.

Agrobiostandard's lawyer Oksana Malenko separately stated that the law enforcement officers' accusations of the absence of an assessment of Volyntorf before its sale were unfounded, since, according to the updated law, property assessment is not carried out, and the starting price of the auction is determined based on its book value, and this is exactly what the SPF did.

She added that even based on the plot that the investigator wrote, this case is subject to investigation by the NABU, and not the SBI.

The State Property Fund and Volynpryrodoresurs have not yet commented on the situation. Interfax-Ukraine sent them relevant requests.

As representatives of Agrobiostandard reported at the press conference, the group of companies employs more than 10,000 people. All enterprises operate during the war; the company already has experience in privatization during the war.

According to the public register, Agrobiostandard was registered in June 2019. The charter capital is UAH 2.5 million. The final beneficiary is Viacheslav Suprunenko, Brovchenko's share is 20%.

As the SPF said, the new owner of Volyntorf is obliged to pay the company's debts of approximately UAH 20 million, continue to provide services for the supply of thermal energy to consumers with whom Volyntorf has entered into relevant agreements, and within six months to pay off debts on wages and to the budget and do not fire employees.

The Fund said that Volyntorf specializes in the production of peat briquettes. It has licenses for the use of subsoil at the Zasvittia Sytneliuk (for 18 years) and Soine (19 years) fields.

In the first half of 2023, it received UAH 90.4 million in income, and for the whole of 2022 – UAH 200 million. At the same time, in January-June 2023, Volyntorf earned UAH 6.2 million in net profit, and for the whole of 2022 – UAH 10.6 million.

As of June 30, 2023, Volyntorf's current accounts payable were UAH 20.2 million (in particular, according to budget calculations, UAH 8.9 million, and according to wage calculations, UAH 2.6 million).

The facility includes 109 units of real estate (industrial, warehouse, administrative premises, etc.) with a total area of more than 16,000 square meters. It employs 302 people and has 164 vehicles on its balance sheet. The state-owned enterprise also includes a separate division, Manevytsky Peat Plant.

At the beginning of July, the State Property Fund held an auction for the sale of Rivnotorf, for which they offered UAH 205 million, while Zhytomyrtorf, which was put up for sale without a license, did not find a buyer.