Ukrainian President Petro Poroshenko wants to have the Ukrainian state defense concern Ukroboronprom audited by one of the “Big Four” accounting firms – Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers.
“The audit, in order to ensure that our international partners also trust it, should preferably be done by one of the four world-renowned auditing companies. With others there is a lower level of trust,” he told ICTV in an interview.
Poroshenko also noted that the Ukrainian state auditing service, the accounts chamber, “and any other organs that have a right to audit” will be involved in the auditing of each Ukroboronprom contract.
A scandal emerged at the end of February this year after an independent journalist investigation exposed corruption in the Ukrainian defense industry.
Journalists from Bihus.info reported that that Ukrainian state defense factories had been buying military equipment components from Russia. The parts were smuggled into the country, they were not checked for quality, and occasionally, ordinary scrap metal ended up in Ukraine. The smuggled goods were then made to appear legitimate through companies controlled by persons with a close connection to Ukroboronprom, and profits were split between scheme participants.
The investigation was based on correspondence leaked to the program’s editorial staff by an anonymous source in 2018. The documents included names and dates, as well as bribe and kickback amounts.
Ihor Hladkovskiy, one of the suspects in the case, called it a fake, but his father Oleh was nevertheless fired from his position as First Deputy NSDC Secretary. Ukroboronprom also dismissed Oleksiy Babych, director of the Kharkiv Morozov Machine Building Design Bureau, and Serhiy Filonenko, director of the Izyum State Instrument-Making Plant.
Ukroboronprom was established in December 2010, and includes more than 130 defense industry companies.