Law enforcement officers are investigating the activities of the "reliable" contractor for "Kyivteploenergo" and "Kyivvodokanal"

Officials of ME "Kyivteploenergo" and PJSC "Joint Stock Company "Kyivvodokanal" constantly provide work for law enforcement agencies. Currently, the National Police is investigating new cases of possible embezzlement of budget funds during the cooperation of these two municipal monopolies with LLC "Ukbudpr" — a well-known construction contractor throughout Ukraine.

Currently, investigators have already established that in 2022-2024, part of the 534 million hryvnias spent from the city treasury on various works was channeled by the aforementioned company through fictitious companies and "undeclared" workers, and some repairs were carried out unclearly. In the near future, expert assessments are to be carried out in the relevant case to establish the exact amount of damage. It is quite possible that charges will be handed out — moreover, the director of the mentioned LLC David Kizimenko already "has experience in this matter." Interestingly, his father, who was previously also involved in "budget contracts", was convicted of separatism in 2018.

According to KV, law enforcement officers are currently studying facts of possible massive "budget cuts" during procurement by officials of ME "Kyivteploenergo" and PJSC "JSC "Kyivvodokanal".

The relevant investigation is being carried out within the framework of criminal proceedings No. 42023102070000310 dated October 11, 2023, which was opened by the police department in the Kyiv Metropolitan of the Main Directorate of the National Police in Kyiv. The persons involved in this case are preliminarily accused of crimes as per Part 4 of Article 191 (appropriation, embezzlement of property or taking possession of it by abuse of an official position, committed on a large scale or under martial law) and Part 3 of Article 358 (forgery of documents, committed repeatedly or by a prior conspiracy by a group of persons) of the Criminal Code of Ukraine.

What the case is about

In the course of this investigation, the realization of 9 contracts with a total amount of over 534 million hryvnias, concluded with LLC "Ukbud-Project-Reconstruction" ("Ukbudpr") in 2022-2024, attracted the attention of law enforcement. Specifically, these agreements concern ME “Kyivteploenergo” regarding the third commissioning complex of the reconstruction of the thermal network section along Naberezhno-Luhova Street and Naberezhno-Khreshchatytska Street (61 million hryvnias), the reconstruction of the flue duct on 1 Mykola Vasylenko Street (47.8 million), and the fifth commissioning complex of capital repair and restoration of the architectural monument of local significance "Men’s Gymnasium" and additional work on this object (4.8 million and 1.9 million respectively).

As for agreements with PJSC "JSC "Kyivvodokanal", the focus of investigators fell on contracts regarding the current repair of the 600mm diameter water supply network on 18/2-24 Vyshhorodska Street, and additional work on this object (3.9 million and 1.9 million respectively), the current repair of the tracks of the Desnyanska Water Station of the Kyivvodokanal Water Supply Department (1.7 million), the reconstruction of the 200 mm diameter sewer network on Zhukovsky Street from Hvardiyska Street to Vasylkivska Street (41.2 million), the reconstruction of the Left Bank collector with a bypass road from chamber No. 6 to chamber No. 47 (249.4 million), and the reconstruction of the 750 mm diameter sewer collector on Shevchenko Street (120.8 million).

During the pre-trial investigation, law enforcement found that certain reconstruction works on the thermal network on Naberezhno-Luhova Street and Naberezhno-Khreshchatytska Street were actually performed by individuals with no employment relationship with LLC "Ukbudpr", who were not officially employed, and who received cash payments for their services. This fact was confirmed by the very individuals who were questioned as witnesses. In this connection, the National Police concluded that the mentioned funds were diverted to the shadow economy sector through the use of services from fictitious enterprises — for cash withdrawal and minimization of the tax burden of the contractor company, leading to further non-payment of relevant taxes.

Additionally, law enforcement learned that these individuals did not have the necessary qualifications and experience to perform the work. According to the investigators, the above-mentioned points to the fact that the work is being carried out improperly and subparly, not meeting the requirements outlined in the contract terms.

Screenshot of the judicial decision on this case from November 1, 2024

In the case of other contracts, investigators found that during their implementation, LLC "Ukbudpr" procured works, services, and materials from business entities referred to as fictitious and do not conduct any business activities. The investigation refers to 4 companies whose names are not specified in the judicial decisions on this case. According to the investigation, this may indicate "the use of these legal entities for the withdrawal of funds transferred to their accounts into the shadow economy for subsequent cash withdrawal."

On November 1, 2024, at the request of the law enforcement, the Podil District Court allowed investigators and prosecutors to search of the office of LLC "Ukbudpr." This would provide law enforcement access to documents related to the execution of the above-mentioned works — contracts, tax invoices, delivery notes, invoices, payment orders, etc. These "papers" are required by investigators for conducting expert studies (evidently, including to determine the amount of damage. — KV), identifying individuals involved in the criminal offense, etc. Moreover, earlier law enforcement sent a request to the company for the "voluntary" provision of these documents, but this request was ignored.

It is worth noting that earlier, at least until the summer of 2024, in this case, investigators studied other facts of possible misappropriation of city budget funds managed by "Kyivteploenergo." However, it is presently unknown if investigators continue to "explore relevant versions."

Thus, earlier, the National Police established that since 2021, this utility enterprise purchased various goods (mainly special clothing) from LLC "UTMK Trade" at inflated prices in the amount of more than 30 million hryvnias, and subsequently, a portion of these funds was embezzled through about forty fictitious enterprises. In this connection, investigators have already established a circle of individuals who may be involved in such acts — discussions concern an unnamed female citizen who helped divert municipal resources into the shadow economy. This year a search was conducted at her home, during which cash and gadgets were seized — the latter may aid law enforcement in the investigation, which will involve special judicial expertise.

Regarding the Figures

According to the analytical system Youcontrol, LLC "Ukbudpr" was registered in Kyiv in July 2015, but since December 2022, the company is "registered" in Brovary, Kyiv Region. Its head, founder, and ultimate beneficiary since July 2020 is David Kizimenko, who is registered in currently occupied Donetsk.

This LLC is a regular participant in tenders held by various state and municipal structures in Ukraine. According to the public procurement analytics database Clarity Project, "Ukbudpr" holds 46 contracts worth a total of 1.7 billion hryvnias, with 4 more agreements worth 240 million hryvnias possibly signing soon. In the capital, this company collaborated only with the aforementioned PJSC "JSC "Kyivvodokanal" and ME "Kyivteploenergo." At the same time, LLC "Ukbudpr" has repeatedly been involved in numerous scandals regarding possible violations in the appropriation of budget funds in various regions of our country.

For instance, in August 2023, "Slidstvo.Info" reported that this company participated in the reconstruction of the Kyiv region and was subsequently involved in a criminal case regarding the embezzlement of budget funds. Besides, the State Audit Service checked the reconstruction of the Borodyanka Center for Social and Psychological Rehabilitation, handled by LLC "Ukbudpr," due to discovered signs of law violations. Additionally, according to the above-mentioned publication, the head of the company David Kizimenko, as of 2023, was a suspect in a case involving the embezzlement and misappropriation of 1.4 million hryvnias during the reconstruction of the Sumy Regional Military Administration (RMA), undertaken by LLC "Ukbudpr".

In addition, another company related to David Kizimenko and his relatives has also been embroiled in questionable situations. LLC "Hozhimservice" (another major "budget contractor, which has 344 contracts worth almost 4 billion hryvnias) in 2018 was involved in the repair of a water pipe in the city of Dniprorudne, Zaporizhzhya Region. Later, investigators found that the work was not entirely completed. Due to this, in 2019, Mark Kizimenko (David’s brother) was detained, taken into custody, and charged with misappropriating budget funds on a large scale.

Among the co-owners of LLC "Hozhimservice" until 2010 was also David’s father — Oleh Kizimenko. According to Krym. Realii, he joined the city’s management back in 2012 after being transferred from the Donetsk Regional State Administration (RSA) during Viktor Yanukovych’s presidency. In March 2014, when control of the administration was seized by Russia, Kizimenko continued to serve in his position for several months. In July, he resigned and then moved to another, lower-ranked position in Sevastopol’s administration — deputy head of the department of municipal economy.

However, in 2016, Kizimenko left Crimea and returned to his native Donbas. For two years, he lived peacefully in the Kyiv-controlled territory and engaged in business. But on September 11, 2018, Kizimenko was arrested on Ukrainian territory. According to the then Prosecutor General Yuriy Lutsenko, he "assisted in the creation of occupational authorities, handed over service documentation to the occupiers, and aided the Russian Federation in subversive activities against Ukraine." In December 2018, Oleh Kizimenko was sentenced to five years probation for separatism.

KV has repeatedly reported that ME "Kyivteploenergo" and PJSC "JSC "Kyivvodokanal" frequently appear in "criminal chronicles" over allegations of possible corruption crimes, often leading to the issuance of suspicions to officials of these "municipal monopolies".

For instance, within the framework of "fresh" proceedings, the Kyiv National Police recently determined that "machinations" might have occurred during the reconstruction of various equipment of ME "Kyivteploenergo" (including deaerators), which cost 114.1 million hryvnias in 2023-2024. According to the investigation, LLC "Atomrembud," the contractor of these works, procured equipment from questionable firms, the price of which was inflated, and "excess funds" were laundered through business entities with signs of being fictitious. Moreover, "Kyivteploenergo" concluded contracts with the mentioned company for works that were not displayed in the electronic trading systems.

Consequently, under the current suspicion is the head of SP "Kyiv Heating Networks" Vasyl Derevytskyi. The latter is already officially accused within another criminal case regarding the loss of the Kyiv budget over 1.5 million hryvnias.

In addition, shortly, the Pechersk District Court of the capital may conclude the case of embezzling funds at PJSC "JSC "Kyivvodokanal". This offense is imputed to three figures, including the deputy general director of the specified joint-stock company, Volodymyr Darahan. All of them face up to 12 years in prison. According to the investigators, due to the actions of the accused in 2019-2020, "Kyivvodokanal" lost 3.29 million hryvnias when procuring submersible pumps due to inflated prices. At the initial stages of the investigation, law enforcement officers investigated a broader range of possible violations committed by the supplier of the pumps, LLC "Company "Sphere of Comfort", but they were not officially proven.

Since December 22, 2018, ME "Kyivteploenergo" has been headed by Vyacheslav Bind (on the right in the collage). This enterprise is subordinate to the Department of Housing and Utility Infrastructure of the Kyiv City State Administration (KCSA), which has been headed since July 17, 2017, by the aforementioned Dmytro Naumenko. The latter, by the way, is currently under investigation for possible embezzlement of budget funds amounting to 1.19 million hryvnias during the construction of a water supply system on Zroshuvalna Street. Kyiv’s housing and utilities sector has been controlled since 2014 by the Deputy Head of the KCSA Petro Panteleyev.

As of November 1, 2023, the duties of the chairman of the board and general director of PJSC "JSC "Kyivvodokanal" are performed by Oleh Lysyuk (on the left in the collage, before this, he was deputy general director for capital construction and investments, leading it since July 26, 2023, in acting capacity). His predecessor as the head of this monopoly company was Serhiy Krushanovskyi, who also led this PJSC as the acting head since April 12, 2021. In this office, he replaced the aforementioned Dmytro Novytskyi, who currently serves as the deputy head of "Kyivvodokanal" for strategic policy. In the KCSA, the work of PJSC "JSC "Kyivvodokanal" has long been coordinated by the same Petro Panteleyev.

It should be noted that as of today, 25.46% of the shares of this PJSC are in the municipal ownership of Kyiv (represented by the KCSA’s Department of Municipal Property. — KV), in addition, the community owns 61% of the shares of PJSC "Kyivenergo Holding Company", which owns the remaining 67% of the shares of "Kyivvodokanal". At the same time, it should be reminded that soon the city authorities plan to "seize" this joint-stock company’s functions of water supply and drainage in the city and transfer them to the newly created homonymous ME "Kyivvodokanal" — to facilitate future financing of its activities from Kyiv’s budget.

Ivan Kulyk KyivVlada