Amid war with Russia, Ukraine reveals $40 million fraud in arms purchases

The embezzlement involved the purchase of 1,00,000 mortar shells for the army (Representational)

Kyiv:

Ukraine’s SBU security service said on Saturday it had uncovered a corruption scheme involving nearly $40 million in arms purchases by the country’s military.

The announcement of massive procurement fraud, confirmed by Ukraine’s Defense Ministry, will have a huge resonance in a country reeling from Russia’s nearly two-year-old invasion.

The fight to root out endemic corruption remains a key issue as Ukraine makes its bid to secure membership in the European Union.

The SBU said an investigation “exposed Defense Ministry officials and managers of the arms supplier Lviv Arsenal, who stole about 1.5 billion hryvnia in the purchase of shells.”

“According to the investigation, former and current high-ranking officials of the Defense Ministry and heads of affiliated companies are involved in embezzlement.”

It said the embezzlement involved the purchase of 1,00,000 mortar shells for the army.

The SBU said a contract for the shells was signed with Lviv Arsenal in August 2022 – six months into the war – and payment was made in advance, with some funds transferred abroad.

But no weapons were ever provided and some funds were transferred to other foreign accounts, the statement said.

The statement said five individuals had been served “notices of suspicion” – the first step in Ukrainian legal proceedings – to both the ministry and the weapons supplier. It said a suspect was detained while trying to cross the Ukrainian border.

Corruption within the military has been a particularly sensitive issue in Ukraine as it tries to maintain wartime public morale and present its case for joining the 27-nation European Union.

Defense Minister Oleksiy Reznikov was fired last September over various corruption cases despite having a solid reputation in representing Ukraine in discussions with Western allies.

Although he was not personally accused of being involved in corruption, under his leadership the army was accused of several cases, one over supplying food to soldiers, another over purchasing suitable clothing for soldiers.

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