The prosecutors of the Specialized Anti-Corruption Prosecutor’s Office (SAPO) have referred the first episode of the so-called “Rotterdam+ formula” case to court, the SAPO’s press service reported on Wednesday, March 15.
Rotterdam+ is one of the most controversial cases associated with alleged corruption during the Petro Poroshenko presidency.
In 2014, Ukraine lost control of many coal mines due to Russia’s invasion of the Donetsk and Luhansk regions. Coal is a big part of Ukraine’s total energy production and the country had to import.
Due to its commitment to the European Union, Ukraine was required to create a transparent method for determining electricity prices. As a result, Ukrainian regulators developed a pricing formula known as the Rotterdam+ formula, which was used by Ukraine to set electricity prices between 2016 and mid-2019.
The formula was based on the average index price of coal in European coal hub cities, including Rotterdam, and the cost of delivering the coal to Ukraine. However, the National Anti-Corruption Bureau of Ukraine (NABU) became interested in the added delivery costs, as only a small amount of coal was actually delivered. NABU said that energy consumers paid Hr.39 billion (about $1 billion at today’s exchange rates) for deliveries that didn’t actually take place.
Now the pre-trial investigation in the case is over and the indictment has been sent to the High Anti-Corruption Court (HACC) for review on the merits. The indictment against six persons in the case has been submitted to the court.
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The accused in the case are the chairman of the National Energy and Utilities Regulatory Commission (NEURC), one of the members of the commission, the head of the department, and the head of management of the NEURC, as well as the deputy commercial director and department director of one of the private companies.
According to the assessment of the investigation, the introduced formula resulted in Hr.19.357 billion ($530 million) in losses to electricity consumers during 2016-2017. Therefore, the prosecutor filed a civil lawsuit for compensation for the damage caused by the criminal offense to the state for this amount.
The DTEK Group – the largest private investor in the energy industry in Ukraine – noted in response that on Sept. 21, 2021, the HACC confirmed the legality and validity of the closure of the Rotterdam+ formula case.
“This decision was confirmed by the appellate body and became legally binding. The DTEK company has no reason to doubt the objectivity and fairness of this court decision. All procedural terms within the framework of this criminal proceeding have long passed. These facts are confirmed by the court decision,” the company said in a statement.
“The legality of the actions of NABU and SAPО to send the case to court raises reasonable doubts,” DTEK added, assuring that they will make every effort to protect the honor and reputation of the company and its employees.
NABU detectives reported on Aug. 8, 2019, that they suspected six individuals of being involved in the Rotterdam+ formula, which resulted in a loss of Hr.18.87 billion ($510 million) to electricity consumers.
At that time, NABU revealed that among the suspects were Dmytro Vovk, the former head of the NEURC, and Volodymyr Butovsky, the former deputy head of the energy market department of the NEURC.
In November 2019, the HACC arrested Vovk and Butovsky in absentia, and they are hiding from the investigation. However, several times in this high-profile proceeding, decisions on closure have been made.
On Sept. 22, 2022, Oleksandr Klymenko, the head of the SAPO, canceled the decision to close the Rotterdam+ formula case, calling it illegal and unfounded, and entirely changed the group of prosecutors handling the case. On Oct. 26, 2022, NABU and SAPO notified 15 individuals of suspicion in this case.
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