Press centre
21.09.2021
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JSC “SFGCU” RECORDS NUMBER OF VIOLATIONS IN ALL AREAS OF ACTIVITY

As of today, JSC “SFGCU” records significant violations in all areas of activity for the period from November 2020 to September 2021.

Thus, in recent months there have been significant problematic receivables on the part of non-residents in the amount of about 29 mln. USD.

As part of the criminal proceedings against the actions of the previous management, 54.3 ths. tons of barley were seized at the “Transservice 2008” terminal. Of these, 32.6 ths. tons are on board for more than 2 weeks, which can lead to a significant deterioration in quality or damage to the goods, further leading to significant financial losses.

Law enforcement authorities also found that the previous management of the corporation conducted grain export operations with non-resident companies controlled by them in the period from November 2020 to August 2021. The cost of the goods was understated with significant deferment of payment.

According to the preliminary analysis of the commercial activity of
JSC “SFGCU”, since the beginning of the year losses from the purchase and sale of grain at “non-market” prices may amount to about a billion hryvnias.

Purchases of grains of 2021 harvest were mostly made at an inflated cost of
300-500 UAH per ton through companies that use the VAT carousel fraud. For such purposes, the spot procurement procedure was changed, namely, documents confirming the origin of grain were removed from the list of mandatory documents, which made it possible to use the VAT carousel fraud. Thus, JSC “SFGCU” may not receive the VAT refund in a significant amount.

During the specified period, the forward program of grain procurement was completely stopped, and the forward procurement division was laid off as a structural unit of the corporation.

With regard to the work of the corporation’s branches, as of today the load of its own elevators since the beginning of the year is only 10% of their total capacity. Since the beginning of the year, Odesa Grain Terminal and Mykolayiv Port Elevator have transshipped only 573 ths. tons of grain, as transshipment was mostly carried out on a commercial basis at the “Transservice 2008” terminal.

No deliveries were made during this period in the framework of cooperation with the Chinese strategic partner, CCEC. For all the time of cooperation, this is an absolute anti-record. At the same time, the previous management of the company involved financial advisers of “Rothschild & Co” and “Renedes” in the negotiation process, as of today they have not joined any processes related to the restructuring of the loan obtained under the guarantees of the Ukrainian government from the Export-Import Bank of China.

All the above facts indicate the extremely inefficient work of the corporation’s management. On all facts of abuse, official investigations have begun and, based on the results of their completion, appropriate statements will be submitted to law enforcement agencies.

Acting Chairman of the Board of JSC “SFGCU” Vasyl Kovalenko, who was appointed to this position on 15.09.2021, considers the following priority steps to stabilize the situation:

– Establishing cooperation with the strategic Chinese partner — CCEC — and returning to the constructive dialogue on restructuring of the loan of the Export-Import Bank of China.

– Construction of the balanced trading strategy that will ensure profit and protect the corporation from price risks in the course of commercial activity.

– Restoration of reputation in foreign markets to counterparties.

– Avoidance of purchases of agricultural products of unknown origin for further full VAT refund, which will positively contribute to the amount of the working capital.

– The most efficient use of own elevator capacities.

– Renewal of the forward program of grain procurement as an important tool of the corporation’s activity and support of agricultural producers.