The enterprises of Ukroboronprom state concern reduced export volumes to $451 million a year compared to $900 million in 2013, director general of the state concern Aivaras Abromavicius has said at a meeting with Ukrainian President Volodymyr Zelensky in Kharkiv. “The most important reform we have already launched is the reform of exporters … We are reducing the number of exporters from six to two at the initial stage,” he said.
He specified that in order to rectify the situation, “movement veteran” Mykhailo Morozov was appointed to this direction. He has led ISTIL Group for more than ten years and has significant experience in managing special exporters, in particular, Progress state enterprise.
The director general of Ukroboronprom noted that 1,500 people are engaged in exports in the state concern, while in a Turkish company with export of $300 million per year some 80 people.
“People are sitting in the center of Kyiv, it is not clear what they are doing. We’ll motivate those people who will stay with us to work, because every time you go abroad, you have to blush,” Abromavicius described the current situation and plans.
As an example, he cited his recent trip to Peru and retold criticism from colleagues from South American countries.
“Guys, it’s hard to pronounce your names: Ukroboronprom, Spetstechnoexport, Ukrspecexport … You all run around, each with two agents, lower prices for your manufacturers,” they said.
The Ukroboronprom director emphasized that such a lack of culture and coordination within the concern should cease.
Baker Tilly Ukraine LLC from the Baker Tilly international audit network, has won a tender to select an auditor of consolidated statements of the Ukroboronprom state concern.
According to the ProZorro platform, where the auction was held on Thursday, Baker Tilly initially offered UAH 29.988 million for its services, while Ernst & Young LLC, its only rival, offered UAH 32.5 million, which corresponded to the starting price, and the total price amounted to UAH 29.336 million.
“This will be the first consolidated audit of the concern in the entire history of its existence,” the Ukroboronprom said in a statement.
The state concern said that earlier international audits were carried out only at individual enterprises –members of the concern. In particular, Baker Tilly Ukraine has already conducted an independent financial audit of the state-owned company for the export and import of military and special-purpose products and services Ukrspecexport, which is the largest Ukrainian special exporter and part of the Ukroboronprom group of companies.
Ukroboronprom recalled that the search for an auditor has been ongoing since 2017 and was unlocked in the summer of 2019, when Ukrainian President Volodymyr Zelensky reshuffled the concern’s supervisory board.
Ukraine’s President Volodymyr Zelensky has signed a decree appointing Aivaras Abromavicius director general of the Ukroboronprom state concern, according to a document posted on the presidential site. “Aivaras Abromavicius is appointed general director of the state concern Ukroboronprom,” according to decree No. 641/2019 published on the Ukrainian presidential website on Friday evening.
Before that, the Ukrainian president issued decree No. 640/2019 relieving Pavlo Bukin of his duties as head of Ukroboronprom.
Abromavicius was Ukraine’s economy minister between December 2014 and April 2016.
The former deputy head of the Presidential Administration under ex-President Viktor Yanukovych, Andriy Portnov, has said Ukraine’s State Bureau of Investigations (SBI) has opened a criminal case to probe facts of embezzling funds from state-run Concern Ukroboronprom and siphoning them off into offshore accounts, and suspects in the case “could include dozens of ex-President Poroshenko’s allies.”
“Let me inform you about a new criminal case, which can incriminate dozens of people among Poroshenko’s associates. The SBI yesterday officially registered the case and began its investigation,” Portnov said on Facebook on Thursday.
Portnov said Poroshenko gave direct instructions to ex-National Bank of Ukraine Chairwoman Valeriya Gontareva, and the NBU board on January 19, 2016, revoked NBU decisions on hard currency control involving foreign economic activities, establishing that payments of Ukroboronprom to offshore accounts could be used for making prepayments without NBU hard currency controls and limits.
“This enabled the theft of several billion hryvnias from Ukraine’s army, hiding behind official decisions made by the NBU,” Portnov said.
Interfax-Ukraine has not received confirmation from the SBI regarding Portnov’s statements.