Kyiv Armored Plant suffering major losses over bankrupt partners – media

Following a financial inspection at the Kyiv Armored Plant, the State Audit Service revealed violations worth tens of millions of hryvnias over a period from January 1, 2012, to late September 2018.

The auditors noted that the plant management did not thoroughly control the fulfillment of contractual obligations, which led to multi-million losses, the online media project Marlin wrote, citing a letter of the State Audit Service, according to the Economichna Pravda.

"The company failure to take measures to eliminate breaches of contractual discipline due to the court acknowledging their contractors as bankrupt, accumulating receivables, which is a consequence of insufficient internal control over the implementation of contracts the company concluded, led to the loss of assets totaling UAH 20.2 million and, in the future, may lead to losses amounting to UAH 3.9 million," the agency says.

For untimely fulfillment of contracts concluded with military units, courts imposed on KAP fines and penalties totaling UAH 8.4 million.

Also, the auditors revealed issues in cooperation with state-controlled weapons exporters, namely, the reservation by the latter of KAP funds up to UAH 17 million, which deprived the plant of the right to dispose of working capital and allocate funds for carrying out settlements, including on debt obligations.

In a separate line, the KAP management is believed to have failed to take measures to ensure registration of the title to land plots with a total area of 47.1 hectares located within Kyiv city limits. Such negligence can lead to an actual loss of ownership. In addition, during 2012-2018, the armored plant reported UAH 3.2 million expenses for maintaining two land plots with a total area of 4.9 hectares, while, in fact, the land was never used.

As reported earlier, the National Anti-corruption Bureau suspects KAP officials of abusing power in a UAH 57.1 million purchase of steel, which did not meet design requirements.