TO THE PRESIDENT OF UKRAINE

PETRO POROSHENKO

Dear Mr. President!

Agroton Public Limited expresses its deep respect for you and hereby applies for your protection of its rights as one of the largest agricultural holdings in Ukraine, with shares traded by international financial investors on the Warsaw Stock Exchange.

In line with your strong focus on improving the investment climate in Ukraine, we hereby draw your attention to a blatant raider attack situation arising on Agroton’s assets, an attack that appears directly related to the leadership of the Ministry of Agrarian Policy and Food of Ukraine. If allowed to continue, the potential direct losses for Agroton and its international investors shall amount to 6.5 million U.S. dollars.  The cost to the Ukrainian economy, on top of this 6.5 million U.S. dollar cost to Agroton, shall approach an additional 6.2 million dollars if the attack persists unchecked. Therefore, we now publicly bring to light the facts of secretive criminal offenses on our property.

The specific facts of the attack involve the unlawful disposal of "Novoaydarsky Elevator" (enterprise code 05516375), a subsidiary of State Company "Khlib Ukrainy" and which has been lawfully rented by Agroton from the year 2000 until 2021 under a lawful lease agreement. Under the laws of Ukraine, Novoaydarsky Elevator cannot be privatized or disposed in any way. 

This week Agroton has discovered for the first time that there has been an unlawful change of the owner of Novoaydarsky Elevator and that this unlawful change dates back to 2014. The new owner is Limited Liability Company "CIVIC ALLIANCE GROUP" (enterprise code 39516829), a company registered under straw owners.

According to the Law of Ukraine "On the list of State property objects not subject to privatization» (¹847-XIV dated 7 July 1999) Novoaydarsky Elevator is specifically mentioned on the list of assets which cannot be privatized, and it remains on this list to the present time.

Furthermore, Verkhovna Rada passed the Law of Ukraine "On administration of State property objects" (¹ 185-V, Article 11, Paragraph 9 dated 21 September 2006) which states that assets which cannot be privatized under Law ¹847-XIV, such as Novoaydarsky Elevator, cannot be transferred, mortgaged, sold or otherwise conveyed in any way.

Thus, from July 1999 until the present day Novoaydarsky Elevator is a protected State asset and unable to be sold to any private party.

Despite the above, Agroton has discovered this week that Novoaydarsky Elevator was transferred by a court decision to Limited Liability Company "Azovska Prodovolcha Compania" (enterprise code 30776349, address: Ukraine, 83045, Donetsk city, 43, Lenin St.).  The decision was rendered on 20 June 2014 by Judge S. P. Shlykova of the Kyiv Regional Court located in Donetsk, Ukraine – in the area under control of Donetsk People’s Republic. 

The court’s decision was based on a false contract number #12/08/2010-14, dated 12 August 2010, fabricated and signed between Azovska Prodovolcha Compania and State Enterprise Khlib Ukrainy in 2014. This fake contract was written as if to make it appear that Khlib Ukrainy agreed in 2010 to supply 10,000 tons of sunflower seeds to Azovska Prodovolcha Compania at a price of 3,300 UAH per ton. It is important to note that the payment terms of this fake contract were impossible on their face. The fake contract states, and the Donetsk court uphelp, that Azovska Prodovolcha Compania made a cash prepayment of 33 million UAH to Khlib Ukrainy – for the full value of the grain under contract – through five cash installments of 6,600,000 UAH over five days. This sort of cash transaction has been both impossible and illegal since 9 February 2005, in accordance with the National Bank of Ukraine’s Decree ¹ 32 which sets the maximum amount of daily cash settlements companies at 10,000 UAH (all payments exceeding this amount must be conduct via wire transfer).  

In actual fact, the purpose of creating the fabricated 2010 contract was for Azovska Prodovolcha Compania to be able to lay the groundwork for a 2014 court claim against the Novoaydarsky Elevator public asset, and to raid it into private hands.  This occurred with the complicity, knowledge and full support from senior officials of the Ministry of Agrarian Policy and Food of Ukraine, who oversee Khlib Ukrainy and Novoaydarsky Elevator, as well as the Chairman of Klib Ukrainy Mr. Igor Petrovich Kobelya and the Head of Novoaydarsky Elevator Mr. Vladimir Vladimirovich Kravtsov.

Having achieved the illegal privatization and transfer of Novoaydarsky Elevator into its possession, Azovska Prodovolcha Compania then sold Novoaydarsky Elevator to LLC "CIVIC ALLIANCE GROUP" (enterprise code 3951682) on 8 June 2015. On the following day, 9 June 2015, Azovska Prodovolcha Compania mortgaged the Novoaydarsky Elevator asset to LLC "MERIDIAN SMART TRADE" (enterprise code 39486611).

To cover up its raider attack, on 13 October 2015 and 3 November 2015 the Ministry of Agrarian Policy and Food of Ukraine posted false “black PR” information on its official website about an alleged “raider attack” on Novoaydarsky Elevator by Agroton Group, even claiming that Agroton is owned by Mr. Oleksandr Efremov, a man under criminal investigation currently (see http://minagro.gov.ua/uk/node/18714). To be clear, Mr. Efremov never has had any relation to Agroton, this is confirmed by the official ownership information contained in Ukraine’s State Register of Legal Entities and Individual Entrepreneurs as well as in the publicly available data on the Warsaw Stock Exchange. Agroton has no ties with Mr. Efremov and its use of the Novoaydarsky Elevator has been entirely legal in accordance with its 21-year lease history. The Ministry of Agrarian Policy and Food of Ukraine is writing history and events out of thin air in order to deflect attention away from its own raider activities.

As of 5 October 2015, Agroton has been blocked from entering the Novoaydarsky Elevator by multiple armed personnel who answer to LLC "CIVIC ALLIANCE GROUP" as well as to Mr. Kobelya and Mr. Kravstov. The armed guards have placed secure seals on silo bins, closing the elevator and blocking access to employees. Conveniently, there are more than 91,000 tons of grain belonging to Agroton as well as the Agrarian Fund of Ukraine in these silo bins at this moment. The losses due to theft of this grain, both to Agroton and the Government of Ukraine, are set forth in the table below. After being blocked from accessing its grain, Agroton discovered the sham paper trail leading to LLC "CIVIC ALLIANCE GROUP."

Given that the Ministry of Agrarian Policy and Food of Ukraine has: (1) refused to address, after repeated inquiries, how the Novoaydarsky Elevator could have passed into private hands in violation of Ukrainian law; (2) failed to express any concern to date over the theft by armed men of more than 44,000 tons of grain belonging to the Agrarian Fund of Ukraine at the Novoaydarsky Elevator; and (3) quite oppositely chosen to spread blatantly false information about Mr. Efremov being an owner of Agroton and Agroton being at the Novoaydarsky Elevator illegally, one can only draw the reasonable conclusion that senior officials from Ministry of Agrarian Policy and Food of Ukraine have colluded with Azovska Prodovolcha Compania, LLC "CIVIC ALLIANCE GROUP" and government employees at Khlib Ukrainy and Novoaydarsky Elevator to secretly raid a non-privatizeable asset, transfer it quietly into private hands, and steal the existing grain contained it its silos.

Since October, Agroton has repeatedly sought assistance from the Security Service of Ukraine, prosecutors and the police. Nothing has helped whatsoever. So now we look to you, the President of Ukraine and leader of the fight against corruption in this country, to help us in our time of need. Please help us get to the bottom of this sordid affair and uncover what has happened at the Novoaydarsky Elevator, how it could have been privatized, how our lease agreement could have been broken, and what is the status of both our grain and the grain belonging to the Agrarian Fund of Ukraine at the site.

Stock of Grain SSJSC "Khlib Ukrainy" "Novoaydarsky elevator"