Case description
Volodymyr Syvak, former director of the Zaporizhzhia Titanium and Magnesium Plant, was accused of embezzling almost UAH 500 million of the company. A Zaporizhzhia court acquitted him, but the appellate instance overturned the verdict. A new appellate hearing is currently underway.
Volodymyr Syvak was a director of the Zaporizhzhia Titanium and Magnesium Plant LLC, whose 51% was owned by the state and 49% belonged to oligarch Firtash's company. Prior to that, the plant had been a state-owned enterprise with the same name, and it had accumulated a considerable amount of debt.
Under the terms of privatization, Firtash's offshore company, Tolexis Trading Limited, was to invest USD 110 million in the plant to modernize production and pay off the debts of the dissolved state enterprise. The latter, however, did not happen.
According to the investigation, Syvak embezzled UAH 492 million out of the UAH 880 million (converted from US dollars) allocated for modernization. Namely, he transferred them to the accounts of the state-owned enterprise ZTMC to pay off debts to Zaporizhzhiaoblenergo, Energomerezha Holding Company, and Sintez Resource LLC. In addition, the plant repaid its loan debt to Nadra Bank and its overdue debt to Zaporizhzhiaoblenergo.
So all the money was spent on debts, and no modernization took place. Syvak first repaid the debts, stating that otherwise the company would have been cut off from electricity, which could have posed a risk of a man-made disaster in the city.
The Zavodskyi District Court of Zaporizhzhia, which initially heard the case, classified Syvak's actions under Article 191, part 5 of the Criminal Code of Ukraine. Subsequently, Syvak was acquitted.
The HACC Appeals Chamber upheld the court's acquittal. However, Judge Danyila Chornenka expressed a dissenting opinion that Syvak could have abstained from paying a part of the debt to Zaporizhzhiaoblenergo, namely UAH 18 million, for which the same court approved a deferred payment agreement. Thus, Syvak could have waited until Firtash's offshore company paid the money because in this case, the regional power company would not cut off the electricity supply.
Subsequently, the Supreme Court took this opinion into account and sent the case for a new appellate hearing. The HACC Appeals Chamber overturned the acquittal in the episode of UAH 18.6 million embezzlement and changed the classification of the case to Art. 364, part 2 of the Criminal Code of Ukraine. Syvak was sentenced to 3.5 years in prison; a UAH 17,000 fine and a three-year ban on holding certain positions were imposed on him.
However, a week later, the Supreme Court again overturned the decision of the appellate court and referred Syvak's case for a new hearing. The judges explained that the appellate instance did not fully analyze the circumstances of the proceedings and did not properly evaluate the evidence individually and in the aggregate.
In parallel, the Supreme Court finally restored the state ownership of the plant, terminating the privatization agreement with Firtash's company.
According to journalist Oleh Novikov, Syvak fled abroad the day after the verdict was announced, as no interim measure was imposed on him. Now, he is likely to be staying in Austria.
