Statement on The Security Service of Ukraine Recent Investigation Cases | VoxUkraine

Statement on The Security Service of Ukraine Recent Investigation Cases

27 April 2017

On April, 26 the State Security Service of Ukraine conducted two searches with seizure of computer equipment and servers – one in the largest investment company in Ukraine, Dragon Capital, and the second one in a production subsidiary of the state oil and gas giant, Naftogaz, PJSC UkrGasVydobuvannya (UGV).  In both cases the reason was alleged use of illegal software, which firms deny.

Within the last few months[1] the State Security Service of Ukraine (SBU) has been involved in a number of other high public profile searches – namely, it searched the offices of a high-tech anti-corruption start-up YouControl, the International Center for Policy Studies, a think tank, a number of IT companies and other businesses.

We recognize the importance of the SBU role in protection of the national security of the country, and believe in professionalism of the Service. Yet, these cases can damage Ukraine in many ways.

Firstly, lack of public perception of clarity and evidence of crime commensurate with intervention of the SBU, generate mistrust to the country regime and political leadership from the business, civil society and international partners. These cases can further increase the damage and echo the signals done by the dubious law on extension of e-declarations. Adopted a month ago, this legal amendment complicated operations of a broad spectrum of NGOs but, more importantly, put at risk the entire reform of Ukrainian state-owned enterprises by making it nearly impossible to attract independent candidates to their supervisory boards.

Secondly, if perused without full integrity, SBU investigations can well demolish the business and damage the reputation of the suspected companies, and, as a result, divert investment and capital inflows to the country. Both companies play a critical role in fueling the economy of Ukraine. Being a leading Ukrainian group of companies in the field of investment and financial services with dozens of international rewards, Dragon Capital achieved appreciable results in rising billions of dollars of new capital for Ukrainian business over the last 17 years. In 2016 Dragon Capital contributed at least UAH 9 mln supporting some of the most promising analytical, educational, sports, and charity initiatives, including Center for Economic Strategy, VoxUkraine, Kyiv School of Economics, Army SOS, National University of Kyiv Mohyla Academy, GO Global project, ArtUnitedUs, as well as a number of conferences. Likewise, PJSC UkrGasVydobuvannya, which went through the radical reform process led by the new leadership of the enterprise and oil and gas giant, Naftogaz, is finally increasing gas extraction. Litigations can damage its operations and divert Ukraine from the track of energy independence. Thus, going after these companies undermines investment perspectives of the country, energy security, and disincentives business from engagement with the civil society.

Needless to say that these actions of the SBU considerably deteriorate Ukraine’s international image, divert investors from the country and are harmful for economic growth. This is especially puzzling taking into account a recent creation of two investment facilitation offices, one of them at the presidential administration. There is no doubt that Ukraine needs investment but all the efforts of public (and private!) sector to attract it are ruined by interference of the State Security Service and other law enforcement authorities.

Thus, we expect and call for impartial and transparent investigation and application of measures commensurate to the scale of the violations.

Any attempt of the Ukrainian political leadership to use the law enforcement authorities of the situation to protect their political and business interests puts Ukraine on the edge of the economic fall and lost trust of the international partners. We support the leadership of the country, law-enforcement agencies, and anti-corruption institutions in their work to protect national interests and the Law, but we call for transparency and careful balancing of the country interests. We don’t have a right to sacrifice futile economic growth.

Disclosure of interests: CEO Dragon Capital Tomash Fiala is the one of main private donors of VoxUkrane. His contribution is less than 5% of VoxUkraine budget. Dragon Capital donated USD 10,000 on Kyiv School of Economics educational programmes.

Borys Davydenko, CEO and Editor-in-Chief of VoxUkraine
Ilona Sologoub, Chief Economist at the Kyiv School of Economics, member of the Editorial Board of VoxUkraine
Nataliia Shapoval, Vice President for Policy Research at the Kyiv School of Economics, member of the Editorial Board of VoxUkraine
Yaroslav Kudlatskiy, Analyst at the Kyiv School of Economics
Oleksandr Zholud, Chief Expert at the Monetary Policy and Economic Analysis Department of the National Bank of Ukraine, member of the Editorial Board of VoxUkraine
Tymofiy Mylovanov, Honorary President at the Kyiv School of Economics, member of the Editorial Board of VoxUkraine
Tetyana Tyshchuk, iMoRe project leader, VoxUkraine
Oleksandr Talavera, Swansea University
Kseniya Alekankina, Social & Community Editor, VoxUkraine
Alex Nikolsko-Rzhevskyy, Lehigh University, member of the Editorial Board of VoxUkraine
Yuriy Gorodnichenko, UC Berkeley, member of the Editorial Board of VoxUkraine and Chairman of the KSE International Academic Board
Olena Nizaliva, member of the Editorial Board of VoxUkraine, University of Kent
Lidia Zhgyr, Training Program Officer at Kyiv School of Economics
David Menabdishvili, MA, Kyiv School of Economics
Sasha Sukhomlyn, MA, Kyiv School of Economics

Mihail Veysberg, Veysberg and Partners
Andrew Khvatov, studies Public management at Universiteit Leiden / Leiden University 
Kateryna Venzhyk, YouControl
Klym Naumenko
Roman Neiter, MA, Kyiv School of Economics
Alexander Nakhod, Deputy CEO at Ukrposhta
Dmytro Kulibaba, Vise President at Pulse of Democracy, member of the Editorial Board of Black Sea – Caspian Sea International Fund
Dmitry Kolodyazhny
Nelly Stelmakh, Advisor at UkrGasVydobuvannya (UGV)
Victor Maziarchuk, Manager and Chief economic analyst at Financial and Economic Analysis Office in the VRU
Victoria Strakhova, PrivatBank
Illya Neshodovskiy, Associate professor at Kyiv National University of Trade and Economics
Volodymyr Svitelsky, Chief executive officer at
Pavlo Sheremeta, Supervisory Board Member at Raiffeisen Bank Aval, Former Minister at Ministry of Economic Development and Trade
Mila Shchepina
Volodymyr Vakhitov, Assistant Professor at Kyiv School of Economics
Lyudmila SimonovaCFO at Thomas & Simonova
Viktor Goloven, ARTERIUM
Kostya Shvabii
Volodymyr Bryskin, Founder and Owner at Ukrainian children’s literature
Olga Pindyuk
Nataly Zaika, Head of Academic Department, Kyiv School of Economics
Iryna Piontkivska, Troika Dialog Ukraine
Gennadiy Kurochka, Exclusive Representative of CNN in Ukraine, Founder and Managing Partner at CFC Consulting
Ivan Nagornyak, Studies International relations at Taras Shevchenko National University of Kyiv 
Andriy Suprun, NBU
Sergiy Gusovskiy, deputy, Kyiv City Council
Marian Madeła, Project Assistant, at International Atomic Energy Agency (IAEA)
Nadiya Kovalchuk, Project manager at Ukrainian Catholic University
Olena Grudnenko
Kostiantyn Zahorulko, MA, Kyiv School of Economics
Yaroslav Gergalo, OTP Bank
Katerina Lisenkova, Head of Economic Modelling at Fraser of Allander Institute, University of Strathclyde
Ruslan Savchyshyn, Founder at Magneticone Group
Oleksandr Akymenko, Platforma
Alina Kotenko, NGO Ukrainian Community of Health Protection 
Nikolay Dorichenko, Co-Owner and Co-Founder at UB Field
Vladimir Kadygrob, Managing Partner at Zeitgeist Design
Nataliya Zhevago 
Arsen Kostenko
Мykola Skyba, fouder at Next Generation Business School
Dmytro Kolosovskiy
Iurii Znak, Senior Specialist, Investment Attraction at Lviv Regional State Administration
Oleg Dre, Advisor at Ministry of Economic Development and Trade of Ukraine
Vladimir Tarnay, Eidos
Oleksii Hamaniuk, MA, Kyiv School of Economics
Мария Чебанова, MA, Kyiv School of Economics
Vitaliy Protsenko, Financial Analyst at America 2030 Equity
Markijan Żelak, Programme Management Unit, Manager at Good Governance Fund
Julia Mincheva, Marketing & PR Manager


[1] According to the Constitution, the SBU head is proposed by the President and approved by the Parliament.



The authors do not work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations