You're reading: UkrOboronProm chief dismissed amid pressure from Groysman

Roman Romanov, the head of Ukraine’s state-run defense industry concern UkrOboronProm, was dismissed on Feb. 12 after months of speculation and uncertainty over his position.

“I made a decision to leave the director’s office at UkrOboronProm,” a statement published on the concern’s website quotes Romanov as saying. “I gave notice as far back as last year. I hope that Ukrainian President Petro Poroshenko will endorse my decision.”

Just hours later, Poroshenko signed a decree late in the evening approving Romanov’s request.

The press statement reads that under Romanov, who was appointed head of the concern back in July 2014,  UkrOboronProm has supplied up to 16,000 vehicles and weapons units to the Armed Forces and National Guard amid the ongoing war against Russian-led forces in the Donbas. Besides, in the past three and a half years, the concern has paid over Hr 12.5 billion ($464 million) taxes while having received Hr 11.7 billion ($434 million) in state budget funds.

In 2017, the U.S.-based broadsheet Defense News ranked Romanov 62th among world’s top defense industry managers, his company bringing in $1.075 billion in revenues in 2016, a 17% increase compared to 2015. Between 2014 and 2017,  UkrOboronProm rose 14 places to 77th in the rating of the world’s largest defense producers compiled by SIPRI, a Sweden-based independent think tank.

The press statement also says, under Romanov, the concern has cut all ties with Russia, engaging over 500 private businesses to compensate for the shortfall in Russian-imported items so as to continue defense production. Besides, in the past three-and-a-half years, a five-member Supervisory Board was created at  UkrOboronProm.

“The concern became the first of Ukraine’s industrial holdings to launch an electronic tender system, which has helped save over Hr 1.4 billion ($51.9 million) since 2014,” the statement reads. “For the first time in Ukraine’s history, a large-scale defense industry reform, as well as the creation of clusters and corporatization of enterprises, was carried out.”

“We have triggered changes amid a globally twisted media space and a post-truth world,” Romanov said.

Nevertheless, Romanov’s activities as head of UkrOboronProm, which unites over 130 state-run enterprises and dominates Ukraine’s defense industry sector has drawn heavy criticism both from inside the country and abroad.

Before assuming the office in 2014 under a presidential decree, Romanov used to manage Poroshenko’s presidential campaign in the Kherson Oblast. Before that, according to an investigation published by journalist Oleksiy Bratuschak on news website Ukrainska Pravda, Romanov’s automobile dealership in the city of Kherson was an official partner of the Bogdan Corporation vehicle manufacturing group, owned by Poroshenko and Oleh Hradkovskiy, a long-time business partner of Poroshenko.

Since February 2015, Hladkovskiy has been the first deputy chairman of Ukraine’s Defense and Security Council, setting the agenda for defense industrial policy in Ukraine.

However, Romanov has consistently denied all allegations that he has unseemly ties to Poroshenko businesses.

“All these years I have worked at UkrOboronProm, the media has been reminding me that I came to the state concern from the business sector,” Romanov’s Feb. 12  press statement reads. “It is true. And I believe that in every man’s life, there must be a period when he is obliged to serve his country.”

Over the past years,  UkrOboronProm has seen a number of corruption scandals;  in one of the worst ones,  top officials at Lviv Armored Plant were detained by Ukraine’s National Anti-Corruption Bureau in July 2017 for allegedly embezzling Hr 28.5 million ($1.1 million), purchasing defective engines for T-72 tanks. The concern was also repeatedly criticized for being an obsolete, bureaucratized, over-regulated, and unnecessary mediator between the government and the country’s defense industries.

One of the concern’s sharpest critics, the former U.S. deputy assistant secretary of defense, Michael Carpenter, said during a debate at the Lviv Security Forum on Nov. 30, 2017, that Ukraine should get rid of UkrOboronProm in order to stamp out corruption in the military.

In recent months, a growing confrontation emerged between  UkrOboronProm’s head and Ukrainian Prime Minister Volodymyr Groysman.

On Dec. 27,  2017, Groysman publicly called for Romanov’s resignation over the latter’s failure to pay off  Hr 58 million ($2.1 million) in wage arrears at the Mykolaiv Shipyard by Dec. 25. Groysman repeated his call during a cabinet meeting on Jan. 31, saying that he “will not work with UkrOboronProm head Romanov.”

“I took a pause, just to let (Romanov) make up his mind and resign,” Groysman said. “But it didn’t happen, so today I suggest taking a government decision to file a request to the president to dismiss (Romanov)…That’s my last say on the matter.”

Groysman also said that he would ask  UkrOboronProm’s recently-appointed Supervisory Board to come up with proposals for a new candidate for head of the holding.

As of Feb. 13 noon, the board had not yet called a meeting to discuss possible candidates.