Adamovskyi’s group is cheating the army for money

Adamovskyi’s group is cheating the army for money

How a company tied to prominent PPB officials attempts to secure UAH 51 million "expenses" from the Ministry of Defence for a previously terminated contract.

In July, the Kyiv Commercial Court decided to recover UAH 51 million from the Ministry of Defence in favor of LLC "First Group" as compensation for damages incurred.

The case unfolded as follows: The LLC won its first and only tender from the Ministry of Defence for the supply of A-80-DZ gasoline worth UAH 592 million in May 2019. De facto, the company was not a newcomer to the market. The media linked it to the scandalous group "Trade Commodity," which had controlled over half of all fuel supplies for the army’s needs for several years prior.

The group’s success, according to its official investors—the businessman Andriy Adamovskyi and the capital developer and founder of the "NEST" group, Volodymyr Trofymenko—was attributed to business acumen. Critics noted that Adamovsky had previously worked with a then-influential MP from the Petro Poroshenko Bloc (PPB), Oleksandr Hranovskyi and that the head of the "NEST" supervisory board was once Petro Poroshenko’s chief political technologist Ihor Hryniv.

Towards the end of Poroshenko’s tenure, "Trade Commodity" faced problems with the National Anti-Corruption Bureau and the State Fiscal Service. The group was accused, among other things, of mixing aviation kerosene and oil with diesel fuel to minimize tax obligations. It began bankruptcy proceedings but left behind a number of "clone" companies, one of which became "First Group."

However, none of them could achieve the success of the parent group: at that time, the presidency had changed, and the new president had little affection for his predecessor, so it was logical that in January 2020, the Ministry of Defence, citing delays in fuel deliveries, unilaterally terminated the contract without paying "First Group" UAH 182 million for already shipped products. "First Group" filed a lawsuit in the Kyiv Commercial Court, which ordered the Ministry of Defence to make the payment: payments were made in September and December 2020.

Was the conflict resolved? It turned out not to be the case. In 2021, "First Group" again approached the Kyiv Commercial Court, demanding an additional UAH 51 million from the Ministry of Defence. This figure has an interesting backstory. The main resource managed by "First Group" was obtained from LLC "Katma Group"—the main supplier for the group "BRSM-Nafta," owned by Andriy Biba.

"Katma Group" became famous for beingthe largest importer of solvents for the paint and varnish industry (KVED code 3814009090) to Ukraine, which are essentially a mixture of octane-boosting components used in the production of artisanal fuel.

Such an alliance with "BRSM" was very opportune, considering that the State Fiscal Service (SFS) had just blocked the "Trade Commodity" group’s own channel for cheap fuel.

After the contract with the Ministry of Defence was terminated, "Katma Group" transferred the rights to claims on "First Group" for fuel to LLC "Firma ’Fidea’." As the media has repeatedly written, "Fidea" is also part of the "Trade Commodity" group. "Fidea," as the new creditor of "First Group," imposed draconian and non-market sanctions on the "debtor"—15% of the debt value for each month of delay, etc.

Thus, during the time court proceedings were ongoing and the Ministry of Defence delayed returning UAH 182 million for fuel shipped to the army for half a year, "First Group" accrued "interest" to "Fidea," which the Kyiv Commercial Court in July 2021 transferred to the Ministry of Defence’s shoulders. This decision has a taste of cynicism also because the "Trade Commodity" group and its "clones" delayed the execution timelines for most contracts with the Ministry of Defence over the years of their existence.

One would think that after such a blatant operation and the shadow of PPB officials on the group’s reputation, it would no longer be among the army’s suppliers. However, the "Trade" case continues to continue, albeit on a much smaller scale than before 2019.

Since 2020, a new player has appeared in the Ministry of Defence tenders—LLC "Exon Yuk." It signed its first contract with the Ministry of Defence worth UAH 80 million only in June 2021. "Exon Yuk" was founded in December 2018 in Dnipro and is registered to Timur Heydarov and Hennadiy Plihach. The latter worked in "Nafta capital group," which owned gas stations under the SKY brand (the largest local network in Kamyanske), belonging to Trofymenko’s "Capital group" AMC.

Interestingly, a year ago, this network was purchased by "BRSM"-Nafta, which partially sheds light on where the heirs of the "Trade Commodity" group have been getting cheap resources in the last two years to remain in the public procurement system.