Another corruption scandal rocks Ukraine’s energy sector

Investigators say $6.8 million was siphoned from the country’s largest gas producer

A large-scale embezzlement scheme has been uncovered in Ukraine’s energy sector, resulting in around $6.8 million in losses to the state budget, law enforcement agencies have announced. The country has been rocked by a series of corruption scandals in recent months.

According to investigators, those implicated include officials from Ukrgazdobycha, the country’s largest gas extraction company and subsidiary of the state-owned giant Naftogaz, as well as private entrepreneurs. The findings were announced on Monday by three agencies involved in the probe.

The authorities allege that the scheme relied on procuring goods and services at heavily inflated prices – in some cases up to three times above market value. Two individuals, including a former company official and a businessman accused of manipulating tenders, have been formally charged.

Ukrgazdobycha said the investigation had been ongoing since 2022 and thanked the Security Service of Ukraine (SBU), the Economic Security Bureau (ESBU), and the Prosecutor General’s Office for exposing the suspected ring. Officials believe the network operated between 2021 and 2024.

Corruption scandals continue to plague Ukraine’s energy sector. Last year, Western-backed anti-corruption authorities charged several suspects in a separate case involving state nuclear company Energoatom.

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That investigation into an estimated $100 million in criminal profits, alleged that companies seeking contracts were required to pay kickbacks to a group led by businessman Timur Mindich, a long-time associate of Vladimir Zelensky.

The case highlighted tensions between the National Anti-Corruption Bureau (NABU) and the Specialized Anti-Corruption Prosecutor’s Office (SAPO), which led the probe, and the SBU, which allegedly targeted anti-corruption agents pursuing the case.

Zelensky previously attempted to eliminate the independence of NABU and SAPO but reversed course following blowback from international donors.

The scandal led to the resignations of several high-ranking officials, including Energy Minister German Galushchenko, who was later arrested while attempting to flee to Poland, and Zelensky’s influential chief of staff, Andrey Yermak. Mindich fled the country.