Ukraine's Security Service finds embezzlement of $1 bln at Ukrnafta, Ukrtatnafta

MOSCOW. Feb 2 (Interfax) - The Security Service of Ukraine (SSU) has carried out a number of raids as part of an investigation into the embezzlement of UAH40 billion (about $1.1 billion at current exchange rate) by the former management of the country's largest oil producer, Ukrnafta, and largest crude refiner, Ukrtatnafta.

The SSU has uncovered massive schemes to misappropriate UAH40 billion by the former management of Ukrnafta and Ukrtatnafta, Ukrainian media reported, citing a statement on the service's official Telegram channel. The illegal schemes involved tax evasion and money laundering, it said.

Ten "episodes of criminal activity are being documented" as part of the criminal cases, including large amounts of oil products being siphoned off to affiliated companies, evasion of taxes, and creation of bad debts at the oil production and refining companies, which devalued their assets.

Investigators believe these criminal activities were carried out in the interests of the companies' actual owners and beneficiaries.

As part of the investigative actions, the SSU, together with the Economic Security Bureau, carried out a number of searches at the residences of the actual owners and senior executives of the financial and industrial group that these companies are part of, as well as at the addresses of locations where oil products are likely stored in various regions of Ukraine, the SSU said. Based on the results of these actions, Ukrtatnafta's senior management was informed about suspicions that crimes have been committed, it said.

Last fall, the National Securities and Stock Market Commission decided to seize the shares of Ukrnafta and Ukrtatnafta for the state. Prior to the seizure, the Privat Group of Igor Kolomoisky and Gennady Bogolyubov owned about 42% of shares in Ukrnafta and state company Naftogaz Ukraine held a controlling stake, while at Urktatnafta (Kremenchug Oil Refinery) the situation was reversed.

The official exchange rate for February 1 was UAH36.57/$1.