"Back-office" of Ukrzaliznytsia: Who informally manages the state company

Acting Chairman of the Board of "Ukrzaliznytsia" Ivan Yuryk appointed former officials of the State Service of Geology and Subsoil of Ukraine as his advisors: Denys Zhehalov, Dmytro Kashchuk, Denys Puhach, and also former First Minister of Infrastructure Dmytro Abramovych, who also worked at the State Geology during previous governments.

What these appointments indicate and who informally manages the state company are discussed in the material by RBC-Ukraine.

In recent months, new visitors have been noticed in the "Ukrzaliznytsia" building on Jerzy Hedroyts street in Kyiv. Veterans of the management apparatus recognized in them officials who, during previous governments, were seen in numerous corruption schemes in the area of subsoil use.

The advisors to the Chairman of the Board of UZ Ivan Yuryk on a volunteer basis became former head of the State Geology Dmytro Kashchuk, Denys Zhehalov, and also Dmytro Abramovych who, during the previous Minister of Infrastructure Vladyslav Krykliy, held the position of First Deputy Minister responsible for UZ. Also participating in the "back-office" work is Denys Puhach, who previously worked in the same way at the State Food and Grain Corporation.

Personnel of State Geology

The community related to the issuance of licenses for subsoil use first became aware of Kashchuk and Zhehalov in 2014. After the Revolution of Dignity, the Ministry of Ecology and its "subordinate" structures, including the State Geology, were allocated under the "quota" of the coalition government to representatives of the nationalist party "Svoboda". The Ministry was headed by Andriy Mohnyk, who gradually began to place his people down the vertical.

The State Geology was headed by Dmytro Kashchuk. Journalists from "Slidstvo.Info" found out that he previously worked in the Lviv Transport Company "Fiacr", which was owned by Lviv City Council Deputy from "Svoboda" Yevhen Bilynskyi. Bilynskyi was called a creature of Ihor Kryvetskyi, one of the financial "pillars" of the party.

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Dmytro Kashchuk (photo: facebook.com)

One of the main scandals involving Kashchuk was an investigation by the Security Service of Ukraine concerning illegal amber extraction in the Rivne region. According to journalists citing the SSU press service, in August 2014 Kashchuk and other State Geology employees, together with officials from the state-owned enterprise "Amber of Ukraine", signed contracts with controlled structures for the geological study of the amber deposit, while in fact illegally extracting the precious stone.

Nevertheless, on certain resources details remained about the personnel changes Kashchuk was making at the time in "Amber of Ukraine", replacing former managers with his fellow party members from "Svoboda", as well as descriptions of schemes with inflated bills that Kashchuk’s private firms billed to "amber" to bankrupt it.

Moreover, Kashchuk was also accused of transferring gas deposits in the Poltava and Sumy regions to shell companies at low prices.

Together with Kashchuk, Denys Zhehalov also moved from Lviv to the State Geology. Before becoming an advisor in the department, he was engaged in small business, periodically appearing in provincial tender scandals like schemes with overpriced fuel purchases.

Denys Zhehalov and Dmytro Kashchuk (photo: facebook.com)

Moreover, Zhehalov was briefly one of the advisors on economic issues to Sydor Kizin – a "Svoboda" representative who became the head of Zhytomyr Regional State Administration after the Revolution of Dignity. Later, journalists of the "Schemes" program found out that he might have been involved in the illegal acquisition of the Olehivske labradorite deposit.

Despite being formally dismissed from the head position in the department in 2015 (Mykola Boyarkin became acting head), Kashchuk and Zhehalov remained the actual managers of the state system for issuing licenses for subsoil use.

Notably, even several years after the formal dismissal from the State Geology structure, Kashchuk and Zhehalov continued to influence the industry.

Specifically, just a month ago, in May 2021, a document appeared resembling a notification of a criminal offense, which described in detail a scheme for acquiring a gold-bearing deposit in the Transcarpathian region. Gold extracted there, according to applicants, is exported disguised as industrial waste. Among others, Kashchuk is mentioned, but there is no official confirmation of his involvement in this.

From State Geology to "Ukrzaliznytsia"

After the dismissal of Kashchuk and Zhehalov, many of their cadres still remained in the structure of State Geology. Among them is Dmytro Abramovych, head of the subsoil use and international cooperation department.

In 2015 he worked at the Ministry of Economic Development as deputy head of the foreign economic policies department before moving on to work at the State Geology.

Moreover, in 2016 profile media outlets mentioned him as the head of the auction commission directly involved in distributing permits for amber and other mineral extraction. "Our Money" wrote that Abramovich might have been involved in distributing licenses for the development of fields on "preferential" terms to Ihor Kotvytskyi’s entourage.

Dmytro Abramovych (photo: CTS)

The former Minister of Infrastructure in 2019-2021 Vladyslav Krykliy, who accepted Abramovych into the role of first deputy in November 2019, stated then that he crossed paths with the official "through work at the Ministry of Economy".

"He is a very competent, professional bureaucrat, in the good sense. This will be a reliable support, not only for generating ideas, but more for implementing and coordinating processes," Krykliy said then.

In the ministry, Abramovych already oversaw UZ. As an official, he was remembered for scandals with declaring expensive cars and apartments that, according to formal income, he and his family could not afford. Moreover, journalists called him a curator of the scheme involving massive misappropriation of UZ funds during diesel fuel purchases, as well as machinery lubrication.

External Advisors

Another advisor to the head of UZ is Denys Puhach. In 2019, he ran for parliament on the list of the "Strength and Honour" party led by Ihor Smeshko.

Pugach was also called a "watcher" at the Agrarian Fund from the Russian oligarch Oleksiy Fedorychev (in 2018 he was featured in NABU investigations and was put on the wanted list), who resides in Monaco and also invests in the local football club.

For some time, Puhach was involved in the work of the CJSC "Kyiv Electric Car Repair Plant", in particular, overseeing the supply of cable-conductive products, and facilitating the connection of external consumers to the "Ukrzaliznytsia" electrical networks, presumably through his own controlled commercial structures.

In the current UZ structure, there are also at least two managers close to the Prime Minister Denys Shmyhal. These are Oleksandr Zaruba, Director of Commercial Activities and Logistics at UZ, and Dmytro Romanyuk, Director of Government Relations Management.

Zaruba controls all freight operations of the Prydniprovska Railway, particularly the loading in the Kryvyi Rih iron ore basin, impacting the system of wagon distribution in favor of certain market participants.

Romanyuk is known as the student who threw an egg at Viktor Yanukovych in 2004. Since 2015, he worked as director of the international development department of the Ivano-Frankivsk Regional State Administration. In 2019, he was appointed deputy head of the Regional State Administration (the head was Shmyhal).

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Back in March 2021, after the dismissal of the previous head Volodymyr Zhmak, the supervisory board of "Ukrzaliznytsia" stated that it intended to "soon" organize a competition for the position of the company’s head. Later at the end of April it became known about the start of the selection of potential candidates to participate in such a competition.

According to the Prozorro announcement, on June 29 the monopoly was supposed to hold a competition to select a recruiter who would be looking for such candidates.

At the end of May, the head of the temporary investigative commission of the Verkhovna Rada on the investigation of abuses at "Ukrzaliznytsia" Yuliya Hryshyna announced that the Cabinet of Ministers is intended to change the composition of the nobility. However, on June 22, it became known that the powers of the nobility (except for the figure of the GDB investigation Adomas Audickas) have been extended for 3 months. Moreover, it became known that the right to select new members of the national assembly was transferred from the nomination committee to the Ministry of Infrastructure.

According to observers, given the intensity of events and political turbulence surrounding "Ukrzaliznytsia", there is nothing surprising that the acting head Ivan Yuryk and his "back office" are trying to gain maximum control over all directions. Indeed, given the peculiarities of Ukrainian politics, the competition for a new head and new members of the national assembly may equally likely occur within the next few weeks as it may be delayed until the New Year. Accordingly, the current leadership and its entourage are interested in maximum accumulation of liquid resources.

Nadiya Sklyarenko