Ukrainian President Volodymyr Zelenskiy has appointed former Economy Minister Aivaras Abromavicius to the supervisory board of Ukroboronprom, a group of state owned defense companies embroiled in a corruption scandal.
The decree appointing Abromavicious was published on the president’s website on June 12, 2019.
In February, investigative journalists revealed that the son of Oleh Hladkovskyi, the former deputy head of Ukraine’s National Security and Defense Council and a close associate of former President Petro Poroshenko, was involved in a scheme to smuggle parts for military equipment from Russia and sell them to Ukroboronprom at inflated prices. The news sparked outrage in a country that is currently at war with Russia.
“Ukroboronprom is a company with a huge potential yet it has drowned in major corruption scandals over the past few years,” Abromavicius told the Kyiv Post in a comment. “It is critical we bring (the) confidence of taxpayers and society at large that this company is in good order and is run transparently.”
“For that, we need to start the financial audit that has been artificially stalled since 2017, initiate deep and comprehensive personnel changes, assist law enforcement agencies in (the) investigation of the past crimes and perform a strategic audit of the company to pave the way for…positive long-term development.”
Starting in 2014, Abromavicius served as Ukraine’s minister of economic development and trade. In February 2016, he resigned, saying he could not work effectively because a close political ally of Poroshenko was trying to take control of state enterprises under his ministry’s control.
During the 2019 presidential campaign, Abromavicius advised Zelenskiy on economic issues. In an interview with the Hromadske news site during the election, Abromavicius expressed interest in having a continued role in Ukraine’s executive branch or in managing state-owned enterprises.
Zelenskiy and Abromavicius met on May 22 to discuss the country’s economic development, the president’s cooperation with the cabinet, and Abromavicius’ professional future. After the meeting, Abromavivius told the 112 television channel that they discussed the management of state-owned enterprises, including banks.
“I have never wished to work in the presidential administration or in parliament. What is left are state enterprises and the government,” he said. “That is the paradigm in which we will cooperate.”
Ukroboronprom is a group of more than 100 enterprises producing military equipment, including advanced weapon systems. The group has faced several corruption scandals.
In the wake of the 2019 smuggling scandal, Poroshenko launched an international audit into Ukroboronprom’s activities. The cabinet has allocated Hr 32 million ($1.2 million) for the audit, according to the Ukrainian News agency.
Currently, nine of Ukroboronprom’s enterprises are slated for privatization.
During a roundtable discussion on May 27, Abromavicius expressed his views on the group of companies’ future.
“The discussions of liquidating Ukroboronprom must be halted,” he said. Instead, he advised carrying out a management overhaul and possibly placing civilian staff in top positions within the group of companies.
After leaving the economy ministry in 2016, Abromavicius chaired the Ukrainian Corporate Governance Academy, a Kyiv-based non-profit that aims to improve the management of Ukrainian state-owned enterprises, and was co-owner of the Agro Region company.
