Did the ESBU set up the Prosecutor General with a falsified expert report in the case of JSC ‘Ukrgazvydobuvannya’? A lawyer’s perspective.
The human rights activist announced this on the OK Legal law firm’s page.
Mykola Orekhovsky believes that the ESBU’s allegations of embezzlement of state funds through purchases by JSC “Ukrgazvydobuvannya”, resulting in losses of over 295 million hryvnias, can only be substantiated by a forensic economic examination.
However, this expertise is falsified.
“Let me tell you how expert reports are fabricated against businesses. In fact, the only thing unique here is the way investigators and prosecutors falsify evidence through forensic expert reports,” the lawyer believes, explaining that this case concerns the procurement of cement grout, which is used for well construction and therefore has its own specific characteristics.
It was this cement that was supplied to “Ukrgazvydobuvannya” by the company “Drilling Advisor”, which has its own production facilities, laboratory and specialist staff. At the time of supply, the cost of this cement was around 27,000 hryvnias per tonne. The ESBU’s suspicion is based on the fact that the price was inflated by a factor of two compared to the market rate.
“Let’s leave aside the fact that the aim of business is to buy cheaply and sell at a higher price. But let’s return to the most interesting part. How was the market value determined, and what is the crux of the issue regarding the forensic valuation of market value? And why does this apply to any business in Ukraine? If you run a business and bought something for 100 hryvnias but sold it for 200 – congratulations, you are a criminal by the Economic Security Bureau’s definition,” says the lawyer, adding that the ESBU will not check a business’s total costs or compare the price with identical goods.
In this case, the investigation commissioned an expert assessment which allegedly established the market price of grouting cement. Subsequently, a separate expert assessment calculated the financial loss to the state-owned company by subtracting the supply price from the ‘market value’. However, according to Orekhovsky, the expert on whose findings the Economic Security Bureau based its charges conducted the assessment with irregularities.
“The whole secret lies in the market value expert reports. Let’s now look at how the expert determined the market value of this unique grouting cement. The expert writes that there are three methods for determining value: The comparative, cost and income methods. But in this situation, the expert decided that only the comparative method could be applied, as the income method requires data on income received, and the cost method requires data on costs incurred. Although the investigation did have such data,” explains the lawyer.
According to him, the expert chose the comparative method but could not find a similar cement online. He then sent letters to well-known cement manufacturers. They did not supply this type of product, so the expert turned to three other companies.
“These three companies also replied that they did not supply such products, but for some reason based their prices on special cement. And the expert, with nearly 17 years’ experience, used dubious information from strange companies as the source of data for his expert report. For example, a company from the city of Lutsk reported the market price of the product as of December 2022, when it did not yet exist. Another source of data for the expert report had its VAT registration revoked. It is therefore unlikely that it ever carried out any significant supplies at all. “Strangely enough, the prices for a unique imported cement from three companies in different regions coincided exactly,” says the lawyer.
He is convinced that such a coincidence among different, unrelated regional dealers in a competitive market is economically impossible. And it indicates that the expert report data was fabricated. Furthermore, one of the companies, in response to the lawyer’s enquiry, stated outright that it had not provided any answers to the expert.
“In other words, it appears that the investigation’s findings are based on a fabricated expert report. When this whole charade with the expert reports was exposed in court, the Office of the Prosecutor General apparently realised they did not want to be held accountable for such an outcome and passed the investigation on to NABU. But the question for Prosecutor General Ruslan Kravchenko remains. Will the expert, prosecutors and investigators who apparently falsified the prosecution’s evidence in order to harm the business be punished?” concludes Mykola Orekhovsky.
As previously reported by “Ukrainian News”, the Economic Security Bureau could have helped Lviv entrepreneurs avoid liability and reduce the amount of losses caused to the state by 36 million hryvnias. The Economic Security Bureau itself refused to comment on this information, arguing that it is not in the public domain.
