Ukrainian authorities have detained a former lawmaker, Mykola Martynenko, and the deputy chief of state energy firm Naftogaz in a case related to the embezzlement of $17.3 million through selling uranium concentrate at inflated prices, prosecutors and the anti-corruption bureau said on Friday 21st April, 2017.
The National Anti-Corruption Bureau of Ukraine (NABU) suspects former lawmaker Mykola Martynenko of benefiting through an Austria-registered company from the uranium sales to a state-owned enrichment plant in 2014, at a time when he was the head of the energy committee in parliament. The investigation also revealed that the State Enterprise suffered losses of more than 6.4 million EUR for overpayment for the equipment purchased from the Czech joint-stock company “Škoda JS”.
They concern the signing of a contract by the State Enterprise for the supply of uranium concentrate at the price exceeding the one set by producers and abuse of office in the supply of equipment to the nuclear power plants in Ukraine and taking bribes from Czech Skoda and sending the funds to an account in Switzerland.
The NBAU reported that Martynenko was detained on suspicion of committing crimes under Part 1 of Art. 255 (The creation of a criminal organization) and Part 5 of Art. 191 (Assignment, embezzlement of property or occupation by abuse of office) of the Criminal Code of Ukraine.
A few minutes before the detention, MP Serhiy Leschenko of the Petro Poroshenko Bloc, on his Facebook page wrote about the detention of the former lawmaker: “Martynenko was detained by the NABU forces in the case into his receiving kickbacks under Energoatom’s contracts with his Panama-registered company with accounts in Switzerland.”
“The investigation found that the [amount of] losses inflicted on the Ukrainian state [via the Energoatom’s contracts] are over $17 million US dollars,” chief anti-corruption prosecutor, Nazar Kholodnytskyi, told a news conference.
It is said that, to legalize transactions between Škoda JS and Bradcrest, in 2008 an agreement was signed according to which Martynenko undertook to “promote sales and services” of Škoda JS in the Ukranian market. According to Leshchenko, the “kickbacks” to the benefit of Martynenko from Škoda JS deal was 3.6 million Euros sent to BNP Paribas and 2.7 million euros sent to Banque Hottinger & Cie.
Sergiy Pereloma, first deputy chairman of state-run Naftogaz, was also detained, suspected of being an intermediary. His lawyer denied his involvement.
Martynenko is the most high-profile person to be detained for corruption since Roman Nasirov, the head of the fiscal service, who is now under house arrest over the alleged embezzlement of around $75 million.
“This case is political and is not backed by any evidence,” Martynenko said in a video posted on the website of his People’s Front party.
The time line
– On 30th November, 2015 Martynenko had announced he will give up his mandate in connection with a corruption-related scandal involving his name and a campaign against him.
– On 22nd December, 2015 the Verkhovna Rada of Ukraine passed a draft decision on abdication of People’s Front faction member Martynenko of his deputy powers.
– On 28th December, 2015 MP Leshchenko said that NABU is investigating two cases with involvement of Martynenko.
– Martynenko was first questioned on 18thJanuary, 2016.
– On 20th April, 2017, Mykola Martynenko was arrested and detained by the NABU forces.
About Mykola Martynenko
Mykola Martynenko, aka Nikolai Vladimirovich Martynenko, was born on 12th January, 1961 in Svitlovodsk, Ukraine. He is married to Anna Martynenko.
Martynenko’s business origins go way back to the birth of the Ukrainian oligarchic system which was created in the times of the presidency of Leonid Kuchma, circa 1994. However, his political career started a bit earlier, as during Soviet times he used to be among the managers of the Kyiv Komsomol (All-Union Lenin Communist Youth League).
After Ukraine’s independence, Martynenko went into business and became the chief player in the nuclear energy field.
In 2007 he joined the team of Yatseniuk, whose political force Front Zmin united with Tymoshenko’s Batkivshchyna at the time. During the presidency of Viktor Yanukovych, ousted in 2014 by the Euromaidan revolution, Martynenko was considered to be the main sponsor of Ukraine’s opposition.
After the Euromaidan revolution, he was one of the founders of Yatseniuk’s Narodnyi Front. Martynenko is also known as an old friend of the President Petro Poroshenko.
The Swiss Gate: Hottinger & Cie (Zurich) and BNP
In November, 2015, Ukrainian lawmaker Serhiy Leshchenko revealed Swiss prosecution documents containing details of the case against Mykola Martynenko, deputy head of Prime Minister Arseniy Yatsenyuk’s People’s Front party.
Martynenko has been accused of accepting bribes worth 30 million Swiss francs (US$ 29 million) from Czech-based engineering firm Skoda in exchange for a contract to supply equipment to Energoatom, Ukraine’s nuclear power plant operator, according to Swiss documents.
The documents presented by Leshchenko to Parliament on 26th November also detail the scheme thought by investigators to have been used by Martynenko to receive the money.
According to Swiss prosecutors, the money for the contract was paid in the form of commission fees to offshore company Bradcrest Investment.
Martynenko is Bradcrest’s beneficial owner, according to documents reportedly provided by French bank BNP Paribas and Swiss bank Banque Hottinger & Cie to Swiss authorities.
Martynenko is thought to have held multiple accounts with both of the banks.
Leshchenko also shared a letter signed by Swiss vice prosecutor Urs Koehli in which the Swiss prosecutors requested the help of their Ukrainian counterparts and Ukraine’s General Prosecutor Viktor Shokin to collect more evidence about Martynenko.
Martynenko is suspected of having received millions of Swiss francs from bribes deposited in an account of the Swiss private bank, Banque Hottinger & Cie.
The public prosecutor of the Confederation confirmed to the ATS that since 2013 a criminal investigation indeed refers to “a Ukrainian citizen”, without naming it, because of a case of corruption of foreign public officials. To justify the opening of this investigation, the MPC is based on Article 322f of the Swiss Penal Code, which deals with bribery of foreign public officials.
Banque Hottinger & Cie, based in Geneva, Zurich, Basel and Sion, had accepted Martynenko, a Politically Exposed Person (PEP), as a client in 2011 despite known corruption charges against him dating back to 2005. In July 2013, bankers noticed a series of suspicious movements. The accounts of the Ukrainian suddenly accumulated some 30 million francs.
Banque Hottinger & Cie reportedly blocked Martynenko’s funds in 2013, as money accumulated on the account. Thirty million francs would still be frozen in Switzerland.
Banque Hottinger & Cie, a family owned private bank, was Founded by Henri Hottinger in 1968. Frederic Hottinger, his son, was president of the bank since 2010 and at the time of events. He resigned from this position in 2013. In 2015 Banque Hottinger & Cie was declared bankrupt by the Swiss Financial Market Supervisory Authority (FINMA).
The Federal Supreme Court of Switzerland has recently rejected an appeal by Mykola Martynenko and ruled that information about the Swiss bank accounts of his Panamanian companies can be given to detectives from the National Anti-Corruption Bureau of Ukraine (NABU). While the ruling was made on 28th June 2017, it was first reported only on 4th August, 2017 by a German news agency.
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