Repair on Paper and Privatization Without an Auction: Police Investigate Sale of Municipal Premises in Kyiv

The Kyiv National Police continue to investigate possible significant undervaluation in the privatization of non-residential premises with an area of 576 sq. m. on Post-Volynska Street, 3 in the Solomianskyi district of Kyiv.

Their owner in 2020 became LLC “KS Eco,” which collects secondary raw materials and is owned by Kyiv City Council deputy Oleg Kostyushko (UDAR faction). While this company rented the premises from the city community, as usual, “integral improvements” were made to them (on paper — major repairs). But, according to law enforcement, their actual cost was only 75,8 thousand hryvnias, not 1,8 million as was declared and confirmed by the Kyiv City State Administration (KSDA). The result — the company was able to acquire the property bypassing a competitive auction for 7,4 million hryvnias. In January 2026, investigators handed over a number of suspicions in this case — they were received, among others, by the first deputy director of the KSDA Department of Communal Property, Oleg Shmulyar, two property appraisers, as well as the “former” and current directors of KS Eco. The former head of this company is currently declared internationally wanted.

Kyiv law enforcement continue to study possible violations of the law in the privatization of non-residential premises on Post-Volynska Street, 3 (Solomianskyi district), which until 2020 were in the communal ownership of the territorial community of Kyiv.

The corresponding investigation is being conducted within criminal proceeding No. 42023102090000175, which was opened by the Solomianskyi Department of the National Police of Kyiv on 14 September 2023. Olga Bezsonova was notified in absentia of suspicion in this case on 15 January 2026. She is the former director of LLC “KS Eco” — the company that purchased the above real estate from the city community. The notice was delivered to this citizen’s sister. Olga Bezsonova is officially accused of crimes under part 2 of article 233 (illegal privatization of communal property on a large scale) and part 2 of article 366 (official forgery causing grave consequences) of the Criminal Code (CC) of Ukraine.

On 19 March 2026 the Solomianskyi Department of the National Police of Kyiv declared Olga Bezsonova wanted, and a week and a half later, on 31 March, law enforcement issued a resolution to put her on the international wanted list. Already on 21 September 2024 this citizen left Ukraine through the Yahodyn checkpoint heading to the Republic of Poland. Law enforcement believes this person is hiding from the investigation. According to Olga Bezsonova’s lawyer, the suspect is currently residing in Spain. On 9 October 2026 the Solomianskyi District Court, at the request of investigators, chose detention as a preventive measure for this citizen — it must be applied within 48 hours from the moment of Olga Bezsonova’s arrest.

What the investigators established

From April 2011 to December 2015, a series of lease agreements were concluded between the KSDA Department of Communal Property, the municipal enterprise Kyivzhytlospetsexpluatatsiya (KZhSE), and LLC “Budmaterialy-Vtorresursy” for non-residential premises on Post-Volynska Street, 3, with a total area of 556,6 sq. m. for an office and the collection and sorting of secondary raw materials and glassware. Later, in 2015–2018 the leases were amended — according to the changes, the lessee became LLC “KS Eco.” This company was previously “spun off” from LLC “Budmaterialy-Vtorresursy” — so, very loosely, it can be called the “successor” of the “first” lessee.

During the investigation, law enforcement learned that around August 2018, the then-director of LLC “KS Eco,” Olga Kot, formed a “criminal intent aimed at the illegal privatization of communal property — non-residential premises with an area of 575,20 sq. m.” According to the investigation, the official decided to acquire the property “by entering knowingly false information into privatization documents about the performance of integral improvements to obtain the right to privatize.” The plan was that LLC “KS Eco” would carry out repairs in these premises for a certain sum, which would allow the company to purchase the property without a competitive auction, during which the price would likely have risen.

To this end, in August and September 2018 Olga Kot twice sent letters from LLC “KS Eco” to the KSDA Department of Communal Property. According to the National Police, in the first appeal the company director listed the integral improvements required in the premises on Post-Volynska Street, 3. As investigators found, the citizen understood that at the time of the appeal most of the specified construction and repair works at the site had already been “carried out as current repairs during long-term lease use,” and therefore would not actually be performed by LLC “KS Eco.”

In the second letter the company head petitioned city officials to consent to the performance of integral improvements on the leased property. Olga Kot provided the department with a description of the improvements to be made, an estimate of their costs, information on the expediency of carrying them out, and a copy of the design-and-estimate documentation for the respective major repair. According to the investigation, the consolidated estimate deliberately included materials and types of work that had, in fact, already been completed at the site.

On 2 November 2018 one of the deputy directors of the KSDA Department of Communal Property (which one is not specified in the court rulings on this case due to the presumption of innocence) approved a valuation conclusion for the premises at the above address — their value was 7,1 million hryvnias. Almost a week later, on 8 November, the first deputy director of the same department (at that time held by Oleg Shmulyar) consented to the improvements, including integral improvements totaling 1,8 million hryvnias as provided by the cost estimate documentation.

Later, in March 2019 Olga Kot “went on maternity leave,” and the acting director of LLC “KS Eco” during her absence became the above-mentioned Olga Bezsonova. According to the investigation, Kot conspired with Bezsonova — the latter supposedly was to “continue taking actions to prepare and use other forged privatization documents.” In particular, the “temporary head” of LLC “KS Eco” was to conclude a contract for the performance of repair works with a contractor, sign acts of acceptance for completed works, extend the terms of leases of communal property, etc.

In July 2019 Olga Bezsonova sent a letter to the KSDA Department of Communal Property requesting that the leased premises on Post-Volynska Street, 3 be included in the list of objects subject to privatization. Meanwhile, on 8 August the parties had “managed” to conclude a new lease for this real estate.

Around the same period, according to the investigation, Olga Bezsonova concluded a contract with LLC “Resurs Bud” for construction works at the above address. As the National Police established, the agreement was backdated — it bore the date of 14 February 2017.

A year later, on 23 December 2019, LLC “KS Eco” and LLC “Resurs Bud” signed an acceptance certificate for completed construction works at the above address for a total amount of 1,8 million hryvnias. In the period from December that year to January 2020, “KS Eco” transferred 1,8 million hryvnias to its contractor, and later “Resurs Bud,” according to the investigation, transferred these funds to the accounts of two companies with signs of fictitiousness. On 26 December 2019 the lessee of the premises on Post-Volynska Street, 3, informed the KSDA Department of Communal Property about the completion of integral improvements. On 28 January 2020 another agreement was concluded between LLC “KS Eco” and the KSDA Department of Communal Property to extend the lease term for the premises at the above address (until August 2029). After that, on 27 February 2020, the Kyiv City Council officially included this communal property in the list of objects subject to privatization.

In March 2020 a private forensic expert (his name is also hidden) prepared a report at the request of LLC “KS Eco” following a construction-technical examination of the premises on Post-Volynska Street, 3. This document recorded information about the identification and the period of actual execution of the capital repairs of these properties. According to the investigation, the stated information was false, and the expert acted on the basis of “forged privatization documents” (including acceptance certificates for works performed) — “with the aim of obtaining an unlawful benefit.”

On 23 October 2020 a contract was concluded between the city administration’s Department of Communal Property and LLC “Valuation Company ‘Misto’” to evaluate the non-residential premises on Post-Volynska Street, 3. Four days later, on 27 October, the valuation report and conclusion were already sent to the department — according to these documents, the value of the premises was 7,4 million hryvnias (including 1,2 million hryvnias — value-added tax). According to the investigation, the appraisers who calculated the value of the property assisted KS Eco’s management in the illegal privatization of the leased communal property, because they “deliberately did not prepare and submit a negative conclusion indicating the fact that the existing improvements of the leased real estate did not correspond to the supporting documents on the directions and volumes of expenses for the improvements.”

At the end of the same year, on 28 December, a purchase-and-sale agreement for the non-residential premises on Post-Volynska Street, 3 was concluded between the KSDA Department of Communal Property and LLC “KS Eco.” On the buyer’s side it was signed by the above-mentioned Olga Kot, who had just “returned from maternity leave” in September 2020, and on the department’s side by its head Andriy Hudz. The price of the objects, as noted above, amounted to 7,4 million hryvnias.

Subsequently, during January–February 2021 Olga Kot transferred the above funds to the KSDA Department of Communal Property. And already during the investigation, according to the results of a court commission’s construction-technical expert examination, investigators established that the cost of the integral improvements carried out in the premises on Post-Volynska Street, 3 amounts to 75,8 thousand hryvnias. That is, almost 25 times less than what LLC “KS Eco” declared.

Note that in this case in January 2026 investigators delivered additional suspicions — they were received, among others, by the current director of LLC “KS Eco,” Olga Kot, the head of LLC “Resurs Bud,” as well as the above-mentioned forensic expert (who determined, among other things, the period of repair works), two appraisers and the first deputy director of the KSDA Department of Communal Property, Oleg Shmulyar. At the same time, the exact number of “persons of interest” in the proceeding remains unknown.

Some details

These premises were linked to another scandal. In February 2018 the Kyiv City Council changed the rental rate for premises used for receiving and sorting waste: until 2018 it was 5% and was the same for everyone, but according to that decision the rent rate for such objects became from 5% to 25% depending on the distance from residential buildings (if less than 200 m — 25%, over 200 m — 5%). Meanwhile, in May 2018 the Kyiv City Council’s Property Commission, at the request of the KSDA Department of Communal Property, allowed LLC “KS Eco” to lease the premises on Post-Volynska Street, 3 at an even lower rate of 2,5%.

In September that year a group of entrepreneurs engaged in waste sorting appealed to the Kyiv City Council’s Commission on Legality and Anti-Corruption with a complaint that the council’s decision to “diversify” rental rates was discriminatory, and that granting additional preferences to LLC “KS Eco” was illegal.

For example, they pointed out that setting a maximum rental rate for waste-sorting premises at 25% was lobbied by interested persons, and that the purpose of such a decision was to remove small businesses from the capital’s market. In turn, entrepreneurs explained KS Eco’s benefits by the fact that one of the Kyiv City Council deputies is related to it. At the same time, complainants emphasized that their requests to reduce the rental rate for their businesses were rejected by the Property Commission.

In October 2018 the City Council’s Anti-Corruption Commission appealed on this matter to the Department for Prevention and Detection of Corruption of the KSDA, the National Agency on Corruption Prevention, and the Main Directorate of the National Police in Kyiv. In December that year the Kyiv branch of the Antimonopoly Committee of Ukraine (AMCU) criticized those actions of the city authorities. The regulator stressed that rental prices for such objects should not depend on their location. The AMCU also called unacceptable the situation in which certain economic entities, for example LLC “KS Eco,” are granted exclusive benefits by deputies. The City Council was then given a month to correct the violations, but whether this was done could not be found in open-source information.

What is known about the persons of interest

According to the analytical system YouControl, the Kyiv LLC “Budmaterialy-Vtorresursy” was registered in December 1999, and in 2017 the company changed its name to LLC “KS Eco.” Its director is Olga Kot; the founders and ultimate beneficiaries are Kyiv residents Serhiy Stepanchuk and Oleg Kostyushko.

The latter is a deputy of the Kyiv City Council of the VII–IX convocations — he was elected from Solidarity and UDAR. In the previous council term Oleg Kostyushko was secretary of the commission on housing and communal services and the fuel and energy complex (HCS and FEC), which deals, among other things, with secondary resources, and in the current term he is a member of the commission on budget, socio-economic development and investment activity. YouControl attributes nearly three dozen business entities to the so-called Kostyushko family group, engaged in real estate, vehicle maintenance and repair, safe waste collection, and other areas.

By the way, Oleg Kostyushko’s wife Lyudmyla is a deputy of the Zhytomyr Regional Council in the previous VII and current VIII convocations (elected from the parties BPP-Solidarity and Proposition). She is also the owner of the agricultural company Zorya, which grows and processes flax and was created on the basis of a collective farm that covered lands of 4 villages in the Zhytomyr region.

It appears that waste disposal is the Kostyushko family’s main line of business. For example, companies in their orbit, LLC “Kramar Recycling” and LLC “Kramar Eco” (the first is co-owned by Oleg Kostyushko’s brother Maksym; the second is owned by the same Oleg Kostyushko and Serhiy Stepanchuk), which operate in this sector, together signed with various state and municipal bodies of Ukraine over seven hundred contracts for such work worth more than 370 million hryvnias. Interestingly, according to some media, several years ago on local forums in the Vidradny neighborhood, which Oleg Kostyushko represented in the City Council, people wrote that local housing maintenance offices were imposing Kramar Recycling’s services on private-sector residents.

In past sessions of the City Council, at meetings of the HCS and FEC commission, Oleg Kostyushko several times raised the issue of problems faced by waste disposal companies that allegedly received too low payments for their services. For example, to avoid increasing utility tariffs for residents, Kostyushko proposed compensating part of fuel costs for waste disposal companies, which had skyrocketed in price. And in 2017 Oleg Kostyushko even considered the possibility of building Kyiv’s first waste processing plant.

LLC “Resurs Bud” (the declared general contractor for the major repairs of the premises on Post-Volynska Street, 3) was registered in March 2015. Its listed director, owner, and ultimate beneficiary is Serhiy Palamarchuk from the city of Rivne. However, a similar suspicion from law enforcement was received by the previous owner and director of this company, Olga Manko — she owned Resurs Bud from its registration until 2021.

Law enforcement has previously noted obvious “manipulations” in the valuation of integral improvements in communal properties, which allowed their lessees to buy them out at understated prices.

For example, within the above-mentioned criminal proceeding No. 42023102090000175 the National Police is also studying possible violations in the privatization of buildings and tennis courts on Povitroflotskyi Avenue, 63. According to the investigation, the city budget lost about 47 million hryvnias during the sale of these objects due to incorrect valuation — the documents on the execution of integral improvements contained false information about the number of tennis courts built. Recently, five people were suspected of committing these offenses. Among them — the same director of the KSDA Department of Communal Property Andriy Hudz (in the collage on the right) and the head of LLC “Umida Invest” (a former lessee and former owner of the property), which apparently was or still is in the orbit of Ihor Kononenko — a former MP, business partner and political ally of the 5-th president of Ukraine.

Also, within the same case, investigators are probing similar violations in the privatization of the building on Akademika Glushkova Avenue, 1, lit. 65. According to the National Police, the cost of the integral improvements that allowed the lessee to acquire it bypassing the auction in the Prozorro.Sales system was “on paper” overstated by 602,6 thousand hryvnias. Recently the court imposed an arrest on this property, and it seems that “the first suspicions” will follow soon. Apparently, deputies of the Kyiv City Council from European Solidarity — Volodymyr Prokopiv, Lyudmyla Kovalevska and Olga Chaika — should also be concerned about the outcome of this case, since they have a direct or indirect relation to the charitable organization that leased this building from the city community and later privatized it, and LLC “Parkpoint,” which currently owns this property.

In addition, in the “fresh” case from April 2026 the National Police is investigating a number of violations in the privatization of real estate objects that were in communal ownership of the Kyiv community. Law enforcement focused on the sale of 10 buildings and premises with an approximate value of over 64,8 million hryvnias (for some objects there is no price data, so the stated amount is “incomplete”). Investigators found that some objects were sold at understated values (sold at “old” prices), and in one case the city authorities sold a building in a non-competitive manner to a current lessee who had not fully completed repairs there. In addition, one of the buildings was sold to a company whose director was only a nominal person who agreed to provide his documents for 2 thousand hryvnias.

Recall that over the past few years the Kyiv prosecutor’s office has sent to court indictments on roughly six episodes of crimes (there may actually be more), allegedly committed by the same Andriy Hudz and his first deputy Oleg Shmulyar. According to law enforcement, these officials illegally exempted lessees of a number of municipal properties, including the Kyiv cinema building, from the obligation to pay rent to the city budget. As a result of such officials’ actions, preliminary data indicate the city treasury suffered losses of about 24 million hryvnias. These funds will have to be reimbursed by the accused if their guilt is proven.

Andriy Hudz has headed the KSDA Department of Communal Property since 5 November 2014. Since June 2022 the execution of KSDA’s powers in the field of communal property management and privatization has been provided by Kyiv City Council deputy from the UDAR faction and KSDA deputy head Vladyslav Andronov.

Author: Oleksandr Hlazunov

KyivVlada