Ukrzaliznytsia Itself Initiated Criminal Proceeding That Led To Search Of Its Offices

The State Railway Administration (Ukrzaliznytsia) has said that its management initiated the criminal proceeding that prompted law enforcement officials to raid its office buildings on October 14.

According to a press release by Ukrzaliznytsia, the formal reason for the searches of its office buildings was a decision that the Shevchenkivsky District Court of Kiev made based on an application by investigators from the Prosecutor-General’s Office and the Security Service of Ukraine. The investigators alleged that employees of the state enterprise Main Data Processing Center and other structural subdivisions concluded more than 25 contracts with the Universal Information Technologies limited liability company for provision of services worth more than UAH 40 million at inflated prices in 2013-2014. The contract was concluded without tender and in violation of the law.

"The current management of Ukrzaliznytsia set up a commission to audit the financial operations of the Main Data Processing Center. A consequence of the commission’s work was that at the initiative of Ukrzaliznytsia’s General Director Borys Ostapiuk requests were sent to the Security Service of Ukraine and the Prosecutor-General's Office to investigate possible financial irregularities and the operations of the Main Data Processing Center and the Universal Information Technologies,” the press release states.

See also "Ukrzaliznytsia’s Director Says He Has Not Fled Abroad, Willing To Cooperate With Investigators"

According to the press release, the security forces took the path of least resistance by accusing the head of Ukrzaliznytsia and his deputies and opening criminal proceedings against them instead of looking for the guilty.

"As of today, not a single allegation that General Director Borys Ostapiuk, his deputies, and representatives of Ukrzaliznytsia inflicted financial losses on the state has been proven. Obviously, that is specifically why the duration of the financial audits of Ukrzaliznytsia are constantly being extended in the hope that some sort of violations will at least be uncovered," the press release states.

The press release also states that the management of Ukrzaliznytsia is ready to assist the investigation in any way possible, but only if it is conducted with the aim of establishing the truth and bringing real criminals to justice.

As reported, officials from the Security Service of Ukraine (SBU) and the Prosecutor-General’s Office seized more than UAH 7 million and USD 1 million in cash during 19 searches at Ukrzaliznytsia and premises controlled by people linked to Ukrzaliznytsia last week. More than 100 officers conducted the searches. The SBU’s Chairman Valentyn Nalyvaichenko later said, “A money-laundering syndicate had been operating in Ukrzaliznytsia for years.”