Defective mines, billion-dollar contracts, and the most expensive missiles: shocking details of Ukraine’s defense procurement

Due to fraud in procurement, only in 2024 year Ukraine lost about 1,2 billion dollars. This is stated in The New York Times article “Fraud and embezzlement in Ukraine are rewarded with new defense supply contracts.” In the piece, the journalists report on the most expensive of the three offers for artillery missiles manufactured in Turkey, which was chosen by the Defense Procurement Agency. Three companies responded to the announced tender. One said it could supply missiles for about 4200 dollars per unit. A second demanded 4600 dollars. The third quoted a price of 5100 dollars. It is noted that all missiles were identical — manufactured at the same factory, by the same company in Turkey. As a result, the contract went to a subsidiary of the Czechoslovak Group, a large Czech holding, which offered the highest price. According to the publication, this decision increased Ukraine’s spending on missiles by approximately 130 million dollars. In 2024 year the Defense Procurement Agency also sought to purchase Soviet-pattern missiles from a Serbian manufacturer. A chain of intermediaries was created to obtain the missiles. The government signed a contract with the Ukrainian state weapons supplier — “Spetstechnosexport,” which had a history of contract non-fulfillment, and its leaders were suspected of embezzlement and money laundering. Spetstechnosexport signed a subcontract with the American arms company Regulus Global. However, the missile supply deal began to unravel and was eventually aborted. By the beginning of 2025 year, Spetstechnosexport became the largest debtor to the procurement agency, having more unfulfilled contracts than any other supplier, auditors found. Journalists also write about the supply to the Ukrainian army of thousands of defective mortar shells from the Pavlograd Chemical Plant. The shells produced by the plant either failed to explode near enemy troops, or flew out of the launch tubes, or fell with a dull muffled sound, raising only clouds of dust. The plant’s director, Leonid Shiman, was subsequently arrested and charged with corruption. Yet the Defense Procurement Agency of Ukraine continued to sign new contracts with Shiman’s plant. The article states that 7 out of 10 the largest Ukrainian defense contractors received new orders despite open criminal proceedings for fraud, failure to fulfill prior agreements, or arrests of managers for corruption. In particular, the government signed a deal for 280 million dollars while the head of the Pavlograd Chemical Plant was under house arrest in a corruption case. Later Shiman was sentenced to five years in prison for organizing a scheme to sell explosives at inflated prices. Journalists note that auditors found 18 companies that had entered into agreements despite failing to fulfill previous arrangements. Internal government checks showed that only in 2024 year Ukraine lost about 1,2 billion dollars due to fraud, embezzlement, and mismanagement in the defense procurement sphere. In particular, as auditors established, about 126 million dollars were lost due to ignoring more favorable offers and overpaying for weapons. In one case, the companies are still engaged in court battles over the fate of at least 100 million dollars of advance payments for a deal that collapsed. It is noted that checks by the State Audit Service and the internal audit division of the Ministry of Defense cover 2024 and 2025 years. Earlier, “FACTI” wrote about fraud schemes by businessman Ihor Hrynkevych’s companies. Then the DBR established that Hrynkevych’s companies supplied low-quality goods for the Armed Forces of Ukraine, causing damage to the state of more than 934 million hryvnias.