22 May 2019

The Independent Defence Anti-Corruption Committee (NAKO) welcomes the decision of the Cabinet of Ministers to allocate 32 million hryvnyas for the audit of state defence enterprise Ukroboronprom. Prime Minister Volodymyr Hroysman called for Ukroboronprom to define the auditor till 25 May. He also mentioned that the resources have been allocated on condition of repayment so that the defence enterprise could start the deep financial audit of its activity.  

Meanwhile NAKO stresses that right now Ukroboronprom’s Supervisory Board doesn’t work properly due to lack of quorum. Only two out of five vacancies are occupied. These are Rector of Kyiv Politechnical Institute Mykhaylo Zgyrovsky and former Head of DARPA Anthony Tether. Due to the OECD standards of corporate governance, it is impossible to carry out the audit without the effective Supervisory Board. Thus, NAKO calls for the Prime Minister and the President of Ukraine who both have the powers to appoint the Supervisory Board members, to renew the legal capacity of the Supervisory Board.

Former President Petro Poroshenko announced the international complex audit of Ukroboronprom in March 2019 after the Bigus.info investigation which revealed the plunder of millions of hryvnyas and kick-back schemes in the sector of defence. But long time before that, over the last two years, the Independent Defence Anti-Corruption Committee as the organization executing civic oversight in the defence and security sector insisted on the need of the international audit.

NAKO reminds that the winner of all three audit lots should be defined not only under the control of the Supervisory Board but also in a transparent way with the observers representing international partners and civil society.