An audit of the State Enterprise Volynvuhillia has revealed systemic governance deficiencies and practices that for years failed to serve the interests of the state and mine workers. While wage arrears continued to grow, strategic assets were removed from the enterprise, questionable transactions involving critical equipment took place, and effective control over coal production and accounting was significantly weakened.

Among the key findings identified during the audit:

• The sale of strategically important equipment from the Buzhanska Mine at substantially undervalued prices through non-transparent arrangements. Equipment for which the state had invested UAH 10.6 million in acquisition and refurbishment was sold in 2024 for only UAH 3.3 million. Two private companies participated in the auction, both linked through the same individual, raising serious concerns regarding the competitiveness and transparency of the process. As a result, the state-owned mine is currently operating with equipment it no longer owns, while the owner has already demanded the return of the assets. This creates a tangible risk of production disruptions and operational dependency on a private entity.
• The discovery of hundreds of tonnes of unaccounted-for coal stored on site, with an estimated value exceeding UAH 5 million. This volume corresponds to more than 14 railway wagons of coal that was absent from official records. Responsible officials declined to sign the inspection report or provide explanations. At the same location, a mobile coal-processing facility operated by a private company was found to be processing coal directly on site, while a waste rock dump had been acquired by the same company that purchased the Buzhanska Mine equipment. The enterprise’s access control system did not record the movement of private vehicles. These circumstances present significant risks of manipulation of coal volumes and quality, as well as potential unauthorized commercial transactions.
• Serious concerns regarding the use of state-owned property. Audit findings indicate that private businesses occupied and utilized substantially larger areas than provided for under existing lease agreements. While lease documentation covered approximately 400 square metres, actual use exceeded this figure by nearly three times.
• Expenditures of almost UAH 37 million for the relocation of equipment that has not been put into operation. Equipment delivered during 2024–2025 remains unused in the production process.
• Particularly concerning findings related to remuneration practices. Significant payments and bonuses were awarded to management personnel while mine workers faced prolonged wage arrears and the enterprise’s financial position continued to deteriorate. In particular, management staff received UAH 2.46 million in performance-related bonuses. More than UAH 1.4 million was paid for remote work without documented evidence of completed assignments, while an additional UAH 400,000 was paid to the director and chief accountant of the Shakhtar sanatorium over a two-year period after the facility had already been sold. At the same time, wage arrears at the enterprise exceeded UAH 137 million as of early May this year.

The Ministry is taking decisive steps to restore proper governance and oversight at the enterprise. Management changes have already been implemented, control mechanisms are being strengthened, and guaranteed coal sales channels have been secured for state-owned power generation companies. Measures are also being undertaken to address wage arrears and support the financial recovery of the enterprise.

All audit materials will be transferred to the competent law enforcement authorities for further review and appropriate action. We expect a prompt and thorough response in accordance with Ukrainian legislation.