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Kiev court partially grants Russian defense ministry's debt claim

September 19, 2012, 17:11 UTC+3

The ruling will come into force if the parties do not appeal

1 pages in this article

KIEV, September 19 (Itar-Tass) — The Kiev economic court on Wednesday partially met the Russian Defense Ministry's claim to recover the debt of the Unified Energy System of Ukraine /UESU/ which was led by Yulia Timoshenko at one time. The court ordered the government to pay Russia 389 million dollars instead of the 405.5 million dollars demanded by the Russian Defense Ministry.

The ruling will come into force if the parties do not appeal.

The Russian Defense Ministry demanded that the Ukrainian government pay it a 3.239-billion-hrivna /405 million dollars/ debt. According to Russia’s arguments, Ukraine must pay the UESU debt as the guarantor of the corporation. The debt was run in the second half of the 1990s, when the corporation was led by Yulia Timoshenko.

The UESU corporation did not meet its commitments to supply industrial goods for the needs of the Russian Defense Ministry. The Ukrainian government led by Pavel Lazarenko at the time, offered state guarantees to the Russian side, the Russian Defense Ministry said.

But Andrei Bogdan, who represented Ukraine's interests, said Ukraine could not acknowledge the existence of such guarantees.

"The Cabinet denies the existence of state guarantees and the possibility to exact the debt from the Ukrainian state under the UESU commitments. We believe that no such guarantees were ever extended; letters were signed which expressed the personal opinions of certain officials, but there were no government guarantees," Bogdan said.

"State guarantees should be drawn property, they are firmed by government resolution or instruction," he added.

The case materials contain no initial proofs to show a Ukrainian government debt to anybody.

In this connection, the Ukrainian government asked to show such proofs. Also, Bogdan said due to the statute of limitation, Ukraine does not understand why the Russian defense ministry has lodged the claim."

In the summer of 2011, Russian Defense Minister Anatoly Serdyukov sent a letter to the Ukrainian government stating that the UESU's outstanding debt to Russia was 405.5 million dollars. The Ukrainian Prime Minister, Nikolai Azarov, said then he had issued the instruction to consider the statement and "give an answer" after a check. At the same time, he stated that the government would not pay Timoshenko's debt to Russia.

UESU reprsentative Alexander Kovalchuk claimed that "the Ukrainian Cabinet did not give any government guarantees regarding the discharge of the UESU debt."

Meanwhile, the Kiev district court of Kharkov postponed, to October 15, the hearing of the case against former premier Yulia Timoshenko over financial abuse at the Unified Energy Systems of Ukraine /UESU/ in the 1990s.

The prosecutors supported the postponement, but Timoshenko’s' lawyer, lawmaker Sergei Vlasenko said the court should suspend the UESU case proceedings altogether until Timoshenko had fully convalesced, in accordance with the Ukrainian legislation.

Her lawyers insist that the case against Timoshenko over the UESU' activity had been dropped on legal grounds in 2005, and that the Supreme Court had upheld it.

According to the investigator, Timoshenko, who headed the Unified Energy Systems of Ukraine in 1995-1997, is accused of tax evasion worth over four million hrivnas /some 500,000 dollars/, squandering and attempted theft of budget money through illegal VAT refund /25 million hrivnas /three million dollars/, and fraud in office and income tax evasion to the tune of 681,000 hrivnas. The budget money was stolen by using offshore companies controlled by the UESU.

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