Ukraine’s Prosecutor General’s Office is investigating two outstaffing firms that are accused of tax evasion and money laundering, according to Kyiv’s Dniprovskiy District Court court order published on July 16.
The two firms – Promotion Outsourcing and Promotion Staff – have been hiring people for dozens of Ukraine’s biggest companies like Kyivstar, Nova Poshta, and Ukrainian branches of international companies like Adidas, Samsung, Huawei, Toyota.
Outstaffing is a process when a company hires employees through a mediator, which in turn assures employment, taxation, insurance of all staffers. Then the company “rents” employees from the mediator.
The outstaffing firms have used a “hiring scheme” that has “deprived the state budget” of Hr 1 billion, according to the order.
The order allows authorities to search the firms’ offices and confiscate documents with the possibility to cease the documents as well as to get access to bank transfer records conducted by Alfa-Bank, UkrSibbank and Raiffeisen Bank Aval.
The CEO of both Promotion Staff and Promotion Outsourcing Artem Mykhailov told the Kyiv Post that his companies have “nothing to do with the criminal case” based on which the court had issued the order.
The Kyiv Post could not get access to the document to verify the information as details of the pre-trial investigation are closed to the public.
Lavrynovych and Partners, a law firm representing Mykhailov’s companies, is studying the allegations to appeal against the order.
“Our companies provide services within the framework of Ukrainian laws. We pay all the taxes and file accounting in time,” Mykhailov said, adding that the company has paid Hr 1.2 billion to the budget for the period from 2014 to 2018.
“I can’t even assume who might be interested in this,” Mykhailov said. He hopes there will be some clarity by July 24 as lawyers are studying the issue.
Kyivstar, Ukraine’s biggest mobile operator serving 26.5 million customers, and a client of both Promotion Outsourcing and Promotion Staff, told the Kyiv Post that the telecom giant had always been abiding by Ukraine’s laws.
“Kyivstar is oriented towards optimization and efficiency of its operations… For these purposes, we use services of (many) contracting companies,” Kyivstar spokesperson Irina Lelichenko said commenting the court’s order via email on July 20.
But the company abides by the laws and pays all the taxes, she said. According to her, Kyivstar manifests itself best by being one of Ukraine’s biggest taxpayers, paying Hr 5 billion in taxes in 2017 only.
French dairy company Danone, though listed in the court decision as a client of the outstaffing firms, told the Kyiv Post that the company does not work with them.
“Danone does not cooperate with Promotion Outsourcing and Promotion Staff,” Yevgeniya Denysyeva told the Kyiv Post. “We are a responsible employer, adhere to the requirements of the current legislation of Ukraine and transparent personnel policy.”
Kyiv Post staff writer Natalia Datskevych contributed to the story.
