National Police became interested in how Nepop and Komarnytskyi were constructing housing for the employees of the "Kyiv Metro"

Since 2016, these works have been carried out by "Skybud Group" LLC, commissioned by KP “Special Residential Fund” – a company possibly linked to businessman Denys Komarnytskyi (pictured left). According to the investigation, the individuals involved in the case might have falsified additional work requiring over 19 million hryvnias. Evidently, the deputy head of the Kyiv City State Administration (KCSA) Vyacheslav Nepop (pictured center), who oversees this construction according to his duties, is expected to face “hard times”: lately, law enforcement officers have increasingly paid attention to the dubious activities of subordinate KPs.

KV has learned that currently law enforcement authorities are investigating possible abuses during the construction of the residential building for employees of KP “Kyiv Metro” and PJSC “Kyivmetrobud”.

The Main Directorate of the National Police of Kyiv has opened a criminal case No. 42021102010000015 on the possible commission of crimes as provided under part 2 of article 191 of the Criminal Code of Ukraine (misappropriation, embezzlement, or possession of property by abuse of office1 by an official2). On June 10, 2021, the Holosiivskyi District Court allowed investigators access to documents held by KP “Special Residential Fund” (the client of the construction) and "Skybud Group" LLC (the contractor) (*). These include project, budget, operational, and report documentation, invoices for goods and services, act of acceptance of completed works, etc.

It should be noted that the case materials do not specify the names of the stated KP and its contractor. However, court rulings specify the cost of works, procurement code on the Prozorro system, and other data, enabling easy identification of the subjects of this case.

KV decided to analyze how the specified construction unfolded and how budget funds could have been stolen.

Scandalous construction

On March 15, 2012, the Kyiv City Council resolved No. 327/7664 to transfer 0.54 hectares of land at 74 40-richchia Zhovtnya Avenue (now Holosiivskyi Avenue) to KP “Special Residential Fund” for permanent use. The land was intended for the construction, operation, and maintenance of a residential building for employees of KP "Kyiv Metro" and PJSC "Kyivmetrobud" (a permanent contractor of the capital’s subway. – KV ) with social infrastructure facilities and a primary care block.

On February 15, 2013, the Chief Department of Urban Development and Architecture of the Kyiv City State Administration by order No. 1827/0/12/009-13 approved urban planning conditions and restrictions (UPC) for the design of construction of the specified facility at 74 40-richchia Zhovtnya Avenue. According to the document, one can design the construction of one 25-story building with a total area of 16.4 thousand square meters on the plot. The building should have 230 apartments and 62 parking spaces nearby.

On November 20, 2014, the head of the KCSA, Vitaliy Klychko, by order No. 1362, approved the project of the specified building. According to the document, the building’s initial technical parameters were slightly changed – for example, the area of the building increased to 16.87 thousand square meters.

According to the site "Our Money", on April 22, 2015, a construction contract for the residential building for employees of KP “Kyiv Metro” and PJSC “Kyivmetrobud” was signed between KP "Special Residential Fund" and LLC "Investment and Construction Company (ICC)" "Integral Group" (**). The construction was estimated at 133.09 million hryvnias. The contractor was obliged to build a 25-story building with 230 apartments (138 one-bedroom and 92 two-bedroom), create a parking lot for 42 cars (instead of the planned 62 parking spaces – KV) and a bicycle playground for 10 places, etc. The specified contract was concluded before the Prozorro system was introduced, so there is no data in open sources about the deadline for completing these works.

On August 3, 2015, the State Architectural and Construction Inspectorate (SACI) registered a declaration № KV 030152150679 for the start of construction work at the specified address for KP “Special Residential Fund”. The contractor for these works in the document was somehow listed as PJSC “Hypromcivilproekt”. However, on the object passport installed on the construction site soon after, the contractor listed was the aforementioned LLC "ICC "Integral Group", and PJSC “Hypromcivilproekt” was specified as the general designer.

At the end of August 2015, residents of the surrounding houses opposed the construction at 74 40-richchia Zhovtnya Avenue, fearing that the works could destroy their homes and pose a danger to the metro tunnel (a nearby station is "Holosiivska"). In November 2015, Kyiv resident Lyudmyla Hlushchenko registered a petition on the Kyiv City Council’s website calling to ban the construction as it conflicts with urban planning legislation. However, this petition garnered just over five hundred signatures (instead of the required 10,000), enabling city authorities to de jure take no action on this matter. As often happens in Kyiv, public protests ultimately achieved nothing.

According to information from "Our Money", in March 2016, the contract between KP "Special Residential Fund" and LLC "ICC "Integral Group" was terminated. The reason for this is not found in open sources. Two months later, on May 30, 2016, KP "Special Residential Fund" contracted a new contractor, LLC "Skybud Group", for the specified building. Works were estimated at 134.4 million hryvnias, and the executor was to build the same 25-story building with 230 apartments. The work date was set for March 2017 (likely extended many times later – KV).

On October 3, 2016, SACI registered for KP “Special Residential Fund” a new permit № IU 115162772447 for construction work at the specified address. The contractor was LLC "Skybud Group".

On November 29, 2019, KP “Special Residential Fund” announced on Prozorro a tender for additional construction works at the specified construction object. Some works foreseen in the initial project had become necessary “due to unforeseen circumstances”. The announcement stated that a contract would be signed with the previous executor of these works, and such works were technically or economically related to the primary contract. The cost of these works was to be 19.24 million hryvnias. A letter dated November 22, 2019, from LLC "Skybud Group" to KP "Special Residential Fund" confirmed this same amount.

On December 16, 2019, a contract for additional construction works was signed between KP “Special Residential Fund” and LLC “Skybud Group”. The cost remained at 19.24 million hryvnias. The initial deadline for these works was December 2020, but this was extended several times. Eventually, LLC "Skybud Group" committed to “finish this” by June 2021. How much money the contractor has already received under this agreement is unknown.

The tender announcement stated that funding for these works is to come from "enterprise’s own funds." This implies not money allocated by the Kyiv City Council from the city budget but funds earned by KP “Special Residential Fund” during its operation. One might assume that the "initial" contract had similar funding. However, the term "enterprise’s own funds" is quite conditional: city KPs cannot freely manage “their” money since they are accountable to the city’s public, meaning every city resident.

As mentioned above, in April 2021, law enforcement became interested in the construction project at 74 Holosiivskyi Avenue. The investigation specifically focused on these “additional construction works”.

Law enforcement authorities were concerned that the Prozorro announcement lacked "any proper justification for the need to perform these additional works and calculation of exact costs," except for a reference to the Ukrainian Law "On Public Procurement." Also, the mentioned November 22, 2019, letter from LLC "Skybud Group" was not publicly disclosed. Additionally, according to case materials, the police found some scheme involving fictitious businesses organized by LLC “Skybud Group”. The facts described, according to the investigation, might indicate the misappropriation of budget funds.

In May 2021, the National Police sent letters to KP "Special Residential Fund" and LLC "Skybud Group" requesting information on these “unforeseen circumstances” that led to the need for another contract. KP management replied that the enterprise could only provide such documents under a corresponding court order, and the contractor had not responded to law enforcement (as of June 10, 2021). Therefore, investigators decided to seize documents from the subjects of the case.

It should be noted that according to the "LUN" portal, at 74 Holosiivskyi Avenue is the residential complex "Silver House", which is currently still under construction. All apartments have been sold. How many apartments KP "Kyiv Metro" and PJSC "Kyivmetrobud" employees received and on what terms, is not directly reported in open sources. It’s known only that, for instance, in 2015, it was expected that these categories of people would receive about 30% of the apartments, while the rest could be purchased by people not related to the capital’s "subway". On the forum of the "Budynochok" real estate portal, anonymous commentators indicated that KP and PJSC employees were prohibited from disclosing the terms of agreements and that the housing was not provided for free – possibly at preferential prices and on an installment plan.

About scheme participants

According to the Youcontrol analytics system, LLC "Skybud Group" was registered in June 2015. Its current founder is Kyiv resident Oleksandr Stepenko, with Ihor Sofiyenko as its director. Sofyenko, by the way, started in this position recently, as of early July 2021. Previously from September 2019, the company was officially managed by Mykhailo Muzychko.

As KV reported, MP Geo Leros (currently non-factional, formerly from the "Servant of the People" faction) linked this company to controversial businessman and Kyiv City Council deputy of VI calling from the “Leonid Chernovetskyi Bloc” Denys Komarnytskyi. The latter has been repeatedly called one of the "overseers" in the capital from President’s Office head Andriy Yermak. In particular, Komarnytskyi was attributed with interest in construction, mastering budget funds for various infrastructure projects (including Podilsko-Voskresensky Bridge) and sand extraction in Kyiv.

Since March 10, 2016, KP "Speczhytlofond" has been led by Volodymyr Shariy (pictured right), who for the previous year worked as the deputy head of this enterprise. Shariy was a deputy of the previous VIII Kyiv City Council – elected from "Solidarity" and was a member of the city council’s commission on urban development, architecture, and land use. In the local elections in autumn 2020, he ran for Kyiv City Council from the party of Kyiv mayor Vitaliy Klychko "UDAR", but he didn’t get a mandate.

The mentioned KP is subordinate to the Department of Construction and Housing of the KCSA, headed by Borys Rabotnik since July 2, 2021. From March 22, 2016, to October 25, 2019, this department was headed by Kostiantyn Fedotov; from October 25, 2019, to July 1, 2020 – Volodymyr Denysenko; from July 1, 2020, to December 14, 2020, Serhii Martynchuk.

Since 2018, the activities of this department, and thus of all subordinate enterprises, have been overseen by Deputy Head of the KCSA Vyacheslav Nepop. From 2002 to 2018, he headed KP "Zhytloinvestbud-UKB" – an enterprise that also often appeared in "criminal chronicles". For example, the prosecutor’s office is still investigating the possible misappropriation of budget funds during the reconstruction of the Kyiv Zoo at 32 Peremohy Avenue.

Based on open source data, Volodymyr Shariy and Vyacheslav Nepop are well acquainted with the mentioned Denys Komarnytskyi. As blogger and political commentator Yevhen Khursin wrote in October 2020, front companies of the specified businessman and the so-called "overseer" monopolized contracts from KP "Speczhitlofond", and the enterprise is dubbed the "pocket firm" of Komarnytskyi.

In May 2020, a scandalous audio recording of a phone conversation between Denys Komarnytskyi and Vyacheslav Nepop was leaked, during which the former grossly insulted the latter. Bihus Info journalists suggested that Komarnytskyi allowed this due to several city KPs under Nepop’s responsibility awarding billion-worth contracts to Komarnytskyi’s front companies for years.

* LLC “Skybud Group” (EDRPU code: 39861149);

** LLC “Construction-Investment Company “Integral Group” (EDRPU code: 37560169).

Photo: KV collage

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