Thu. Jan 20th, 2022

Steel group ArcelorMittal’s bank accounts in Ukraine were frozen by a court after a senior manager at the company evaded tax evasion in the latest attack on the group by authorities.

The multinational company, one of the world’s leading steel producers, is Ukraine’s largest foreign direct investor and has faced several tax investigations in recent years.

The Luxembourg-based group bought the steel mill in Kryviy Rih – Ukraine’s largest and one of the largest in Europe – from the state for $ 5.2 billion in 2005. He says it has since raised an additional $ 4.8 billion in the country pumped.

A Ukrainian court has ruled in favor of a request from the Prosecutor General’s Office for the freezing of accounts, which has led to the suspension of financial transactions as fears increase over a Russian military attack. Russia has deployed more than 100,000 troops near the border with Ukraine and demanded that the US and NATO agree to security promises banning former Soviet states from joining the Western military alliance and restricting where US troops could be stationed in Eastern Europe.

Ukraine’s court documents have accused the group’s chief financial officer in Ukraine of failing to pay 2.24 billion hryvnia ($ 81 million) in arrears. The allegations are based on investigations conducted by the Anti-Intelligence Agency Security Service (SBU) and are the latest in a number of court cases and investigations against the company over taxation.

The chief financial officer, named by ArcelorMittal as Serhiy Plichko, could not be reached for comment.

But ArcelorMittal defended him on his behalf against the accusations. Yaryna Klyuchkovska, an ArcelorMittal spokeswoman, said tax evasion cases should not fall under the “competence of the SBU’s investigating powers” and the freezing of asset orders in Kiev “was based on an individual, not the company” .

“The company considers these allegations to be unfounded and a clear example of political pressure on a major foreign investor,” a separate company news release said.

“Yet the criminal charges, no matter how ingenious, are brought against an individual, not the company. There is no current tax-related civil lawsuit against ArcelorMittal Kryviy Rih and therefore no legal grounds to freeze the company’s accounts. ”

Klyuchkovska noted that the company has won previous court rulings related to alleged tax evasion in its name and finds it confusing why a corporate officer would be targeted individually, which is a criminal, not an administrative case.

Prosecutors said on their telegram channel, which is used to broadcast official messages, that their actions were aimed at “compensating for the damage done to Ukraine’s budget”.

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