The Supreme Anti-Corruption Court of Ukraine ordered NABU to initiate criminal proceedings in the case of misappropriation of ZTMC property for the benefit of the third parties and infliction of large-scale damage on the company. The decision was made on 17 September 2020 upon the claim filed by Tolexis Trading Limited, the minority shareholder in Zaporozhye Titanium and Magnesium Combine.
The Supreme Anti-Corruption Court of Ukraine ordered NABU to initiate criminal proceedings in the case of misappropriation of ZTMC property for the benefit of the third parties and infliction of large-scale damage on the company. The decision was made on 17 September 2020 upon the claim filed by Tolexis Trading Limited, the minority shareholder in Zaporozhye Titanium and Magnesium Combine.
According to the decision of the Supreme Anti-Corruption Court, NABU is obliged to register the claim by Tolexis Trading Limited (Cyprus), the investor of ZTMC LLC, about the criminal offenses at ZTMC LLC. Earlier, NABU refused to consider this claim for no good reason.
In its claim, Tolexis Trading Limited points to the facts of misappropriation of the company’s property committed by the incumbent management of ZTMC LLC.
Firstly, the establishment of a bogus company with the right to receive payments for the products and other receipts in favor of ZTMC LLC to their own bank accounts. In particular, since June 2020, the law firm “Premium” was granted the right to receive payments for the products sold and other receipts in favor of ZTMC LLC to its own bank accounts, as well as the right to receive the commission as a percentage of the amount of money credited to its accounts based on the commercial representation agreement entered into with ZTMC LLC.
According to the lawyers of Tolexis Trading Limited, because of this agreement, ZTMC LLC receives less money from the sales of products, and the direct property damage is inflicted on ZTMC LLC and its shareholders.
Second, in its claim Tolexis Trading Limited states that since July 2020, ZTMC LLC has been exporting titanium products at prices that are significantly lower than the market ones. In particular, the incumbent management of the company entered into contracts with Tip Trade Industrial Products GMBH (Germany) and ADM Metals GMBH (Germany) for the sale of titanium sponge at a price of $3,000 per ton, which is less than half of the market price. In contrast, in the spring of 2020, ZTMC LLC was selling similar products at a price of $6,300 – $8,000 per ton.
According to the claimant, the damage is inflicted both on the state, which owns 51% of ZTMC LLC, and on the minority shareholder, Tolexis Trading Limited, which owns 49% of the company.
According to Tolexis Trading Limited, as the holder of the minority share, ZTMC LLC has lost a significant part of its profit from selling products at knockdown prices for the benefit of the companies in the middle.