"Zolotoy Mandarin" case sent to court
A prosecutor from the Specialised Anti-Corruption Prosecutor’s Office (SAPO) has submitted an indictment to court, based on materials from a pretrial investigation by the National Anti-Corruption Bureau of Ukraine (NABU), in a case involving the misappropriation and laundering of more than UAH 54.179 million from the state budget.
SAPO reported this, Censor.NET reports.
How the state lost UAH 54 million, according to investigators
The pretrial investigation established that in 2013–2016, the MP devised and implemented a criminal scheme to misappropriate state budget funds by misleading the European Court of Human Rights (ECtHR) about the disputed legal relationship between Zolotoy Mandarin Oil LLC, a company controlled by other accomplices, and Kyivenergo PJSC.
In September 2013, a representative of Zolotoy Mandarin Oil LLC, acting on the suspect’s instructions, submitted an application to the ECtHR seeking payment of UAH 54.179 million from the state budget over an alleged prolonged failure to enforce a judgment ordering Kyivenergo PJSC to repay a debt.
However, at the time of the application to the ECtHR, Kyivenergo PJSC was 75% privately owned, Zolotoy Mandarin Oil LLC had not applied to the state enforcement authorities, and the court had allowed payment under the judgment in instalments. The state therefore should not have been held liable for the failure to enforce the judgment. Furthermore, by that time, Zolotoy Mandarin Oil LLC had assigned its claim against Kyivenergo PJSC to another company and received payment for it.
The former MP subsequently reached an agreement with the leadership of Ukraine’s Ministry of Justice. With their assistance, the Government Agent before the ECtHR prepared a friendly settlement declaration, effectively acknowledging the state’s liability for the failure to enforce a court judgment in a dispute between two private companies.
Funds paid following friendly settlement at ECtHR
Based on this declaration, UAH 54.179 million was subsequently transferred from the state budget to Zolotoy Mandarin Oil LLC and laundered through cash-conversion centres.
It also emerged that, at the time of the application to the ECtHR, the director of Zolotoy Mandarin Oil LLC had already been charged with fraud involving financial resources. All of the company’s assets and accounts had been frozen to secure repayment of debts exceeding UAH 70 million to the state-owned Rodovid Bank JSC. To prevent the funds received from the state budget from being recovered for the benefit of the state-owned bank, the accomplices used forged documents to obtain a court order reinstating the time limit for appealing the judgment five years after it was handed down.
In January 2020, SAPO and NABU served notices of suspicion on six participants in the criminal scheme, and in July 2023, on its organiser, a former Ukrainian MP. Notifying the MP of suspicion became possible after the termination of the immunity he had enjoyed as a relative of an ECtHR judge. Since the former MP had left Ukraine shortly before his immunity ended, he was notified of suspicion in accordance with Articles 135 and 278 of Ukraine’s Code of Criminal Procedure.
The individuals’ actions have been classified under Part 5 of Article 191, Part 3 of Article 209, Part 4 of Article 358, Part 3 of Article 382 and Part 1 of Article 387 of Ukraine’s Criminal Code.
Background
- As a reminder, in August 2023, NABU placed former MP Heorhii Lohvynskyi on the wanted list. He became the seventh suspect in the so-called "Zolotoy Mandarin" case after the termination of the immunity he had enjoyed as a relative of an ECtHR judge. His wife, Hanna Yudkivska, served as an ECtHR judge from 2010 to 2022.
- Lohvynskyi had previously been notified of suspicion in absentia because he had left Ukraine.
- Lohvynskyi served as an MP in the eighth convocation of parliament (2014–2019), representing the "People’s Front". In 2017–2018, he was Vice-President of the Parliamentary Assembly of the Council of Europe.
