Ukraine will sell a plant confiscated from a Russian oligarch who secretly supplied titanium to Russia for missile production

The Cabinet of Ministers has included the titanium plant VSMPO Titan Ukraine in the list of large-scale privatization. Previously, the company was owned by sanctioned Russian businessman Mikhail Shelkov.

The State Property Fund reported that the plant was put up for privatization. They noted that:

• 100% of the company's authorized capital is up for privatization;
• the projected value of the privatization object is not less than UAH 271.72 million.

"The auction commission will set the price and terms of sale and submit them to the Government for approval. After that, the date of the privatization auction will be known. The auction will be held on the trading platform Prozorro. Sale, which will ensure transparency and openness of the auction," the statement said.

It is emphasized that all funds received as a result of privatization are credited to the State Budget of Ukraine. After that, "they are sent to the fund for liquidation of the consequences of armed aggression."

The plant was confiscated from a Russian oligarch

The plant put up for privatization is located in the Dnipropetrovs'k region. The main activity is the production of steel:

• pipes;
• hollow sections;
• fittings.

"VSMPO Titan Ukraine" is the Nikopol seamless titanium alloy pipe plant confiscated from Russian oligarch Mikhail Shelkov. As the Foundation reminded, the company was confiscated by the decision of the High Anti-Corruption Court of January 23, 2023, and transferred to the state.

The oligarch secretly supplied Ukrainian titanium to Russia for missile production

In the summer of 2024, Shelkov was notified of suspicion of organizing the supply of strategic products from Ukraine to arms companies in Russia. The "work" of Shelkov and his accomplices is seen as financing actions that threaten the constitutional order and territorial integrity of Ukraine.

Earlier, the SBU had already served Shelkov with a notice of suspicion of involvement in the supply of Ukrainian titanium raw materials to Russia for the production of Kalibr missiles.

The investigation established that in 2020-2021, Shelkov organized the supply of titanium concentrates worth almost UAH 90 million to Russian companies. The recipient companies were involved in:

• manufacturing weapons for the needs of the Russian Ministry of Defense;
• meeting the needs of the defense industry;
• creation of strategic reserves of the aggressor country for waging war against Ukraine.

Raw materials were supplied secretly. To hide them, the suspects developed a special scheme.

Thus, on paper, titanium concentrates were allegedly supplied to an Austrian company. This was evidenced by the contracts concluded with it.

In fact, the raw materials were immediately shipped to Russian enterprises. They, in turn, paid for the raw materials to the accounts of the Austrian company, at market prices. And this Austrian company paid the Ukrainian supplier at lower prices.

Mikhail Shelkov and business in Ukraine: what is known

Oligarch Shelkov has owned the Demuryn Mining and Processing Plant (MPP) since 2012. The company is one of the largest titanium producers in the world and was part of the Russian state corporation Rostec.

After the start of Russia's full-scale invasion of Ukraine in 2022, the entire property complex of the GOK was arrested as part of the criminal proceedings against Shelkov. The seizure also included 100% of the corporate rights, GOK's vehicles, and the money held in the company's bank accounts.

In 2023, this property and assets were recovered as state revenue by a decision of the High Anti-Corruption Court. The plant is currently owned by Ukraine and managed by the State Property Fund. The asset is being prepared for privatization.

The confiscation became possible because Shelkov is under sanctions in Ukraine. Back in June 2021, the National Security and Defense Council imposed sanctions against the chairman of the board of directors of the Russian VSMPO-Avisma, Sergei Chemezov, and his deputy, Mikhail Shelkov.

At that time, Shelkov was still considered the ultimate beneficiary of Demurynsky GOK LLC. It was also reported that Shelkov, together with his partners, owns a controlling stake in VSMPO-Avisma, the world's largest producer of titanium for the aerospace industry. Thus, the scheme that Shelkov is suspected of organizing after 2021 was also a method of circumventing sanctions.

As OBOZ.UA previously reported, the Ukraina Hotel, located in the very center of the capital, was sold at the first online auction as part of a large-scale privatization. The lot fetched UAH 2.51 billion. That is, the starting price of the hotel increased 2.4 times during the auction. The new owner will be the private company of entrepreneur Maxim Krippa.

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