StateWatch analysts analysed the winners of open food tenders of the Ministry of Defence in 2023, 10 out of 13 companies are classified as risky.

The monitoring included 13 companies that won open tenders organized by the U-MOD Public Procurement Department (PPD) in 2023 for the purchase of food packages, water and cutlery. The analysts checked the businesses for involvement of their officials in criminal offences; commercial claims against suppliers; affiliation with business groups with signs of dishonesty, as well as ties to the authorities, etc.

Out of the 13 suppliers, 10 companies were identified as risky according to the monitoring results, namely

• Grand Consult Ltd;
• Atomservice LLC;
• Trade Granit Invest LLC;
• Kontract Prodreserve 5 LLC;
• Trade Lines Retail LLC;
• Asiks Group LLC;
• Harna Strava LLC;
• Okhtyrka Mit Product LLC;
• Trade Poltava LLC;
• Plastic Group Ukraine LLC.

This list also includes Krona Company, although its risk level is much lower compared to other businesses. Analysts did not characterize the remaining suppliers of the U-MOD – Obolon PJSC and Mit Prom LLC, as problematic.

Defendants in criminal and commercial cases

6 out of 10 risky companies, namely Contract Prodreserve 5, Trade Lines Retail, Atomservice, Asiks Group, Grand Consult, Okhtyrka Meat Product and Plastic Group Ukraine, are involved in criminal proceedings.

One of the companies, Asiks Group, previously supplied the military unit with low-quality food products totalling about UAH 90 thousand, according to the decisions of the Kyiv Commercial Court.

Members of business groups with signs of dishonesty

The business groups with signs of dishonesty include Grand Consult, Atomservice, Trade Lines Retail, and Trade Granite Invest.

Grand Consult is a member of Tetiana Hlyniana’s group of “Bila Tserkva” suppliers. This business is the winner of the largest food tenders of the Ministry of Defence in 2023 and supplied products to the Ministry at inflated prices. Atomservice belongs to the Voynkservis-Volunteer group or, as it was previously called, the Yenakiieve group. Companies from this group, including Atomservice, are involved in the SBU’s criminal proceedings regarding the misappropriation of funds from the social nutrition program for children affected by the Chornobyl disaster in 2018-2020.

Trade Lines Retail LLC is a member of the Hrynkevych group, whose family members are suspected by the SBI of fraud and creating a criminal organization in the supply of uniforms for the Armed Forces. This caused the Ministry of Defence to incur losses of over UAH 934 million.

Trade Granit Invest LLC is linked to the Trade Commodity group of businessman Andriy Adamovskyi, who is listed by the media as a partner of former BPP MP Oleksandr Hranovskyi. Companies from the Trade Commodity group were one of the largest suppliers of fuel to the Ministry of Defence in 2017-2018. In turn, officials of the bankrupt Trade Commodity LLC are suspected of causing damage to the Ministry of Defence in the amount of more than UAH 58 million under contracts of 2016. In 2023, Trade Granit Invest, together with Trade Poltava LLC, tried to disrupt the DPP’s food supply tenders through massive administrative lawsuits. These firms are taking similar actions at the DPP’s food tenders in February 2024.

Companies affiliated with the current and former government

Contract Prodreserve 5 LLC belongs to a number of “favorites” of Dnipro Mayor Borys Filatov. According to the criminal case of the Main Department of the National Police, in 2017-2020, this company monopolized the catering industry in the city’s educational institutions and directed funds to the accounts of fictitious companies.

Another supplier to the U-MOD is “Harna Strava”, which until 2018 belonged to Yevheniia Khraplyvna, the wife of Andrii Khraplyvyi, a prosecutor at the Prosecutor’s Office in Dnipro region. Nowadays, this company, along with Kontrakt Prodreserve 5, is linked by journalists to Oleksandr Sharkun, a former deputy of the Novomoskovsk City Council from the All-Ukrainian Union Batkivshchyna party.

Plastic Group Ukraine also has ties to political forces. One of the company’s beneficiaries, Vadym Yaremenko, used to be a member of the Batkivshchyna party, and his business partner worked as a deputy of the Odesa City Council from the Party of Regions and a freelance assistant to the odious Party of Regions member Vitaliy Khomutynnik. In addition, the director of Plastic Group Ukraine, Serhiy Huban, is involved in the SBI investigation launched as a result of the Ukrayinska Pravda article “Monaco Battalion”.

StateWatch’s monitoring includes only those companies-suppliers of 2023 whose data is open on Prozorro. Some procedures in 2023 were held without the use of the electronic platform (defence procurement). Information on such procurements is published on Prozorro to a limited extent.

The U-MOD Department of Public Procurement (DPP, renamed the Department of Resource Support in June 2023), which procured food, uniforms, and fuel for the Armed Forces until 2024, is currently in the process of liquidation. Since December, the Department’s responsibilities have been assigned to the newly created U-MOD procurement agency, the State Logistics Operator (DOT). In December and February, the DPO was obliged to hold tenders to provide the U-MOD with food for the 1st quarter of 2024. According to the results of the procurement, the DPZ contracted goods worth more than UAH 9 billion. The obligation to procure food for the second quarter of 2024 (April-June) and for all subsequent periods is assigned to the State Enterprise “State Logistics Operator” (DOT).