Media: Supplier for Ukraine’s army acquires Croatian hotels

Labeled by the Ukrainian press the most scandalous product supplier for Ukraine’s Ministry of Defense, Tetiana Hlyniana purchased several hotels in Croatia during Russia’s full-scale invasion, with journalists uncovering them and Ukrainian online newspaper Censor.NET revealing details of how this scheme became possible.

Hlyniana reportedly made excess profits throughout 2022 and 2023 by inflating prices on food items. For instance, with the actual market price of around 6 UAH ($0.16), Hlyniana’s company charged the extraordinary price of 17 UAH ($0.45) per egg supplied to the Armed Forces through catalog pricing schemes in 2023. After journalists discovered the inflated prices, the Ministry of Defense revised some prices in the catalog.

Hlyniana’s companies of the so-called Bila Tserkva group have been making money by supplying food to the army for almost 30 years.

The Censor.NET’s article suggests there may have been corruption or special preferences that enabled Hlyniana’s company to dominate military food supply contracts over many years.

“For the first half of 2023, the Defense Ministry signed 10 contracts with companies that took over the supply of military units in various regions. Among them, the largest contract was awarded to the company mentioned in the egg scandal, Aktiv Company, which received 13 billion UAH (about $471 million, – Ed.), its closest competitors signed contracts for 8.9 billion UAH (about $321 million, – Ed.), and two other companies, which are essentially representatives of the same group, received about 4.5 billion UAH each (about $163 million, – Ed.),” Censor.NET wrote.

After the “egg scandal,” Aktiv Company did not participate in tenders. However, another company from Hlyniana’s group, Grand Consult, won more than $210 million worth of tenders in 2023, as per Censor.NET. Of these, contracts for about $73 million were signed in December 2023. Grand Consult won 10 lots at the latest tender.

Following the publication of an article revealing the inflated prices, Ukraine’s State Bureau of Investigation and National Anti-Corruption Bureau initiated proceedings, but for now, the outcomes of the investigations remain undisclosed. To assess the state’s losses, law enforcement had to confiscate documents from military units, including those supplied by companies such as Hlyniana’s.

The Defense Ministry’s procedure for advance payments exceeding $1.3 million implies personal approval by the defense minister. At the time of the scandal, Oleksii Reznikov held this position. However, his deputy, Viacheslav Shapovalov, approved at least three large advance payments to Hlyniana’s companies. Currently, Shapovalov is held in a pretrial detention center.

Hlyniana channeled enormous profits abroad to fund hotel purchases across the Croatian coast. The discovery of this sparked outrage, given the wartime context. Journalists of NV Business revealed that four Croatia-based legal entities linked to Hlyniana own one private residence in the country and four hotels:

• The Mirari boutique hotel has 18 rooms, a restaurant, and a rooftop pool.
• The 4-star Ora Hotel has 24 rooms, a restaurant, and a conference center for 50 people.
• The 4-star Luxe boutique hotel has 30 rooms, a restaurant, a spa, and a conference room for eight people.
• The 5-star Posh Hotel has six apartments, a rooftop pool, and a spa.

Read also:

• Why Ukraine’s defense minister Reznikov resigned and who is tapped to replace him
• Ukraine’s ex-deputy defense minister, officials detained for money laundering on food procurement
• Why Ukraine’s defense minister Reznikov resigned and who is tapped to replace him
• “People and Know-How, not corruption, now stymie Ukraine’s defense industry,” says Ukrainian Armor director 
• Ukraine’s anti-graft agency and Transparency International Canada to enhance cooperation in corruption disclosure
• Ukraine passes anti-corruption laws to advance EU integration
• Zelenskyy wants to equate corruption with high treason during martial law
• Why Ukraine’s wartime anti-corruption quest gives ground for cautious optimism