Ukraine’s Bureau of Economic Security exchanges accusations with Odesa agro-traders

The Bureau of Economic Security of Ukraine (BES) announced on Thursday that it had uncovered a tax evasion scheme worth UAH 30 million involving a group of companies specializing in the storage and shipment of agricultural products. These companies, accused by American investors of embezzling funds, are at the center of the investigation.

"During the pretrial investigation, detectives discovered that company officials deliberately understated their taxable income. Specifically, their tax reports indicated a service cost of UAH 200-300 per tonne for cargo handling, while the average market price for similar services in Ukraine is UAH 800," the BES stated in a press release on its website.

According to the agency, the difference between the market price and the declared value was transferred to affiliated nonresident entities. The undeclared profits were later funneled back into Ukraine through illegal cash-out points.

The press release also reported that during authorized searches at a grain transshipment terminal, detectives seized primary financial and operational documents, some of which appeared to be forged. These documents pertained to the origin, handling, and export of agricultural products.

Investigative actions are ongoing at the logistics center, the grain terminal, and the companies' office premises, with officials and representatives actively resisting the searches.

"Efforts are underway to identify all individuals involved in the illegal activities, including a well-known sanctioned smuggler," the BES said without providing further details.

The companies under investigation are part of a holding registered in the UAE, which has been implicated in multiple criminal cases and lawsuits regarding opaque operations and unpaid debts to American investment funds. BES highlighted that the holding is also under scrutiny for financial misconduct.

The agency recalled that the High Court of Justice in England had previously issued a global asset freeze order against the ultimate owners of the holding to prevent the potential dissipation of foreign investors' assets. Allegedly, to evade confiscation, the holding created a new company to re-register the grain terminal’s assets and equipment, continuing their unlawful activities.

Meanwhile, representatives of the companies Prista Oil-Ukraine LLC and Attollo Granum LLC held a press conference on Thursday at the Interfax-Ukraine news agency, accusing BES officers of exerting undue pressure on businesses at the Odesa Port.

They claimed that since December 19, BES detectives had been blocking the operations of numerous enterprises under the pretext of tax evasion.

"Every morning, detectives arrive at the site of the search, read out a court decision authorizing 'resumption' of investigative actions, and by evening, the same detective announces a 'suspension' of the action. However, the decision from the Kyiv District Court of Odesa refers only to searches and makes no mention of asset seizures, which are effectively taking place," said Valeriy Snytkin, an attorney.

According to Attollo Granum Director Oleksandr Pavlenko, the company is incurring daily losses of over UAH 750,000 due to the operational disruptions. Together, the two companies employ over 350 people.

Company representatives also stated that law enforcement officers privately indicated they would remain on-site until January 15, despite the court order being valid only until January 10.

The directors of Prista Oil-Ukraine and Attollo Granum said they had filed complaints with the President's Office, the Prosecutor General's Office, the State Bureau of Investigations (SBI), and the Ukrainian Business Support Council. However, no response has been received to date.

A years-long dispute surrounds the Olympix Coupe International Terminal at the Odesa Maritime Commercial Port, which a creditor – U.S. hedge fund Argentem Creek Partners (ACP) – has been attempting to gain control over.

On January 16, 2023, the High Court of England ordered the freezing of assets belonging to Serhiy Groza and Volodymyr Naumenko, owners of GNT Group, totaling $118 million. Additionally, the U.S. asset management firm Innovatus Capital Partners initiated criminal proceedings against GNT Group, accusing it of misappropriating and disposing of collateralized assets. GNT Group has denied the allegations.

In addition to the grain terminal, GNT Group's Ukrainian assets include the Dry Port – a complex for processing grains and oilseeds at the Euroterminal industrial site, connected to the Odesa port by an overpass.