Golden Mandarin case: NABU and SAPO send charges of EUR 1.07 million embezzlement to court

The National Anti-Corruption Bureau of Ukraine (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO) have referred to court a case involving the misappropriation and laundering of 54.18 million hryvnias (EUR 1.07 million) from the state budget.

The scheme was carried out through manipulation of a European Court of Human Rights ruling.

This was reported by NABU’s press service.

According to investigators, between 2013 and 2016 the scheme’s organizer developed and implemented a mechanism for seizing budget funds by misleading the ECHR regarding disputed legal relations between LLC Golden Mandarin Oil and PJSC Kyivenergo. Investigators describe LLC Golden Mandarin Oil as an enterprise controlled by the scheme’s participants and bearing signs of being a shell company.

In September 2013, a representative of LLC Golden Mandarin Oil filed an application with the ECHR seeking to recover 54.18 million hryvnias from Ukraine’s state budget as unpaid debt owed by Kyivenergo under a court ruling that, according to the application, had not been enforced since 2009. However, detectives established that at the time of the ECHR application, the company had taken no real steps to collect the debt: all of its assets and accounts had been frozen to secure obligations to the state-owned joint-stock company Rodovid Bank in excess of 70 million hryvnias, and the company’s director had been charged with financial fraud.

In addition, the defendants concealed from the court the fact that — on the eve of the ECHR application — the right of claim against Kyivenergo had been assigned to another company in exchange for 54.18 million hryvnias.

According to investigators, the scheme’s organizer, in agreement with the then-leadership of Ukraine’s Ministry of Justice, arranged for the government’s agent before the ECHR to prepare a declaration of friendly settlement of the dispute. That declaration effectively acknowledged state liability for non-enforcement of a court ruling in a dispute between two private companies — despite the fact that the right of claim under that ruling had already been transferred. On the basis of the declaration, 54.18 million hryvnias from the state budget were transferred to the enterprise controlled by the defendants. Those funds were subsequently laundered using conversion centers, according to investigators.

NABU’s official statement does not name the main suspect. According to media reports, the key organizer of the scheme is former Ukrainian member of parliament of the eighth convocation from the People’s Front party, Georgy Logvinsky.

In July 2023, the former MP was served with a notice of suspicion as the organizer of the crime. The notice became possible after the termination of his immunity, which he had enjoyed as a relative of an ECHR judge. Since the suspect had left Ukrainian territory on the eve of the immunity’s termination, he was served notice of suspicion in accordance with Articles 135 and 278 of Ukraine’s Code of Criminal Procedure. Six other individuals have also been served notices of suspicion in the case.