Over 120 objects of movable and immovable property of total value of over half a billion UAH can now be neither sold nor used for making budget funds. As the result, the government has already lost over UAH 25 million. This was the decision made by judge of Kyiv Administrative Court Pashchenko, thus violating the law. The Asset Recovery and Management Agency has already called this “a procedural diversion.”
It all started when, at the request of Chief Military Prosecutor’s Office, the ARMA received for management assets connected with Excelsior company. In particular, the assets in question are 40 high-end apartments in Kyiv and Odesa, over 60 parking spots, 20 land plots and part of the facilities in Gulliver shopping mall. As prescribed by the law, the assets then had to be transferred to a management company selected in a competition. The right for these actions was based on seven decisions of investigative judges in the criminal proceeding relating to individuals connected with these assets.
The owners have already tried to get the property seizure overruled by investigative judges over 30 times, but did not succeed. Except for one case: on March 21 this year, judge of Kyiv Administrative Court Pashchenko prohibited management or sale of property transferred to the ARMA. This was decided without the presence of the ARMA, prosecutors, investigators etc.
The ARMA assumed it might have been a mistake and filed an application with the same judge asking to cancel his decision. The judge heard it three times, during three days, over 11 hours, yet he upheld his decision.
Thus, the ARMA faced a strange situation: seven decisions of investigative judges requiring the agency to organize the management of property of people who are currently under criminal investigation, so that, when the case is closed, the earned money would go to the budget or back to the owner if he is ruled innocent by the court. Failure to comply with this decision entails criminal responsibility.
At the same time, there is another decision, by a court of a different jurisdiction, which prohibits this management. If this decision is ignored, the ARMA will stand trial. In addition to that, there are two more evident contradictions. The first one is the fact that the Ukrainian legal system does not allow a judge of a certain jurisdiction to cancel the decision of the judge of a different jurisdiction. Which actually happened: a judge of the administrative court effectively overruled the decisions of seven judges of criminal courts.
The second contradiction is that the administrative court, which prohibited the ARMA to carry out management, based his decision on the idea that it was not proven that this property costs over 200 minimum salaries. It is one of the conditions under which the property is transferred to management. All of this has actually been established – in the previous seven hearings by seven investigative judges, who allowed the ARMA to work with those apartments, cars, facilities.
Today, procedural diversions, abuse of rights and attempts to block the work of the agency through filing a great number of lawsuits in courts of totally different jurisdictions has become a standard course of action for owners of property which is transferred under the management of the ARMA.
On April 22, Kyiv Appeal Administrative Court canceled the decision of judge Pashchenko and allowed the ARMA to continue management of the aforementioned property. At the same time, the Agency has already filed a complaint about the judge with the High Council of Justice – as well as with the NABU, the Prosecutor General’s Office, the SAP, the National Police, about the crime committed by the judge. On April 19, representatives of the ARMA already filed an application with Kyiv Administrative Court about withdrawing Pashchenko due to reasonable doubt concerning his bias in the case, however, this application was denied.
The problem has been temporarily resolved. However, it is only a symptom. An example of how easily a judge can block the work of a national agency and not only allow corrupt individuals to stay free and keep their possessions, but also make the state pay millions for their maintenance.
This publication has been prepared with the financial support of the European Union. Its content is the sole responsibility of Transparency International Ukraine and does not necessarily reflect the views of the European Union.
Transparency International Ukraine works with the National Agency within the project Enhancing the Role of Civil Society in Public Finance Oversight, financed by the European Union. The project aims at empowering civil society and journalists with effective anti-corruption, asset recovery and anti-money laundering tools to perform the public finance oversight, support the launch of Asset Recovery and Management Agency (ARMA) and to update the list of Politically Exposed Persons. Find out more at https://goo.gl/Jgr9ic