Ukroboronprom reacts to new part of probe into procurement of components at inflated prices

The company says the journalists' statement about the cost of goods procured lacks "full understanding of all the nuances of the formation of customs value" and brands it categorically incorrect.

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State-run Ukroboronprom Concern has said the investigative report published by the Nashi Groshi project on the wrongdoings in the process of overhaul of two An-26 airplanes from Kazakhstan is incorrect and manipulative.

"We emphasize the information spread by the Nashi Groshi project has signs of manipulation and manifests biased journalism. After all, the authors failed to cite in their report the Concern's perspective, which had been provided to them at their request. We emphasize the information on the so-called sevenfold increase in the price of components for the An-26 is incorrect," Ukroboronprom press service says.

The Concern said the contract with a foreign counterpart had provided for the installation of two sets of altimeters with three devices in each. According to the terms of the contract, these devices were to be replaced with new ones, manufactured no later than 2015.

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"Ukrainian aviation enterprises contacted by the Concern's representatives said they had no such altimeters at disposal. The only company that agreed to deliver these products was AN Service LLC. They were vetted by Ukroboronprom's Kyiv-based Plant 410 Civil Aviation experts and representatives of the customer. Separately, we note that no other facts of such devices (made after 2014) being imported have not been officially recorded. We emphasize we do not comment on the delivery of altimeters to Ukraine, since the Concern's enterprises did not provide logistics services," the statement said.

Ukroboronprom considers categorically incorrect journalists' statement about the cost of goods "without a full understanding of all the nuances of the formation of customs value."

"The optimal purchase price is evidenced by the fact that the client country purchased these devices from the Ukrainian side, and not directly from the manufacturer, the Russian Federation, which is its partner in the Customs Union and could offer its price," reads the report.

In addition, it is noted the group's profit for this delivery was not below profitability of the entire contract. "The fulfillment of the agreement ensured jobs for several thousand workers in the aircraft industry of Ukraine, while its total cost was about $6 million," Ukroboronprom said.

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As UNIAN reported earlier, Ukrainian investigative journalists on February 25 released a report claiming that Ihor Hladkovsky, the son of First Deputy Secretary of the National Security and Defense Council of Ukraine Oleh Hladkovsky, is involved in large-scale embezzlement of budget funds in the defense sector.

The journalistic investigation says Hladkovsky Jr. and his partners conspired with defense officials to procure military spare parts from Russian smugglers, as well as from Ukrainian Army warehouses. Prices for spare parts, which journalists say often failed to meet quality standards, were hiked significantly. Then, the journalists reported, the perpetrators would sell these goods to defense plants in conspiracy with top managers of Ukroboronprom, Ukraine's state-owned Defense Concern.

The group allegedly earned from Ukroboronprom at least UAH 250 million in kickbacks.

The journalists claim Oleh Hladkovsky is President Poroshenko's ally informally "supervising" the country's defense industry.

On February 26, Poroshenko suspended Oleh Hladkovsky from office, pending a criminal investigation.

On March 4, the president signed a decree to dismiss Hladkovsky from the post of First Deputy Secretary of the National Security and Defense Council.

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On March 4, investigative journalists established that net profit in a scheme to buy An-26 altimeters originating from Russia was at least US$300,000, which was paid from Ukraine's national budget.

Involved in the scheme were the then First Deputy Secretary of the National Security and Defense Council (NSDC) of Ukraine Oleh Hladkovsky, his son Ihor Hladkovsky, Pavlo Bukin, who is now Director General of state-run Ukroboronprom Concern, and former employees of Ukroboronprom Vitaliy Zhukov and Stanislav Khosh, who were business partners of Hladkovsky Jr., journalists from the Bihus.Info investigative project claimed.

Ukroboronprom paid $580,000 for the equipment whose purchasing price was about $85,000, the journalistic investigation says.

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