The state-owned enterprise (SE) Krasnolymanska Coal Company (Donetsk region) has suffered 2.54 billion UAH in damages and was brought to the brink of financial collapse due to the operations of a criminal organization led by Vitaliy Kropachov, the beneficial owner of LLC Ukrdoninvest. According to investigators, the private entity systematically exploited the infrastructure and resources of the state-owned coal mine for years, evaded taxes, and funneled assets to controlled entities. Law enforcement authorities have classified the suspects’ actions as creation of a criminal organization, intentional bankruptcy, and money laundering.
The dependency of the state enterprise dates back to 2003, when coal reserves totaling 65.4 million tons were transferred from the balance sheet of the SE to the private company LLC Krasnolymanske to attract investment. However, the private firm lacked its own access from the surface: ventilation, water drainage, and miner transportation were entirely maintained at the expense of the state-owned mine.
Under the agreements, LLC Krasnolymanske committed to developing 76.8 km of underground mining tunnels. By October 2021, however, it had completed only 12% of the goal (9.3 km). This effectively blocked the state enterprise from accessing another 285.2 million tons of mineral resources. Consequently, SE Krasnolymanska fell into total economic and technological dependence on Kropachov’s private structure.
According to investigators, Vitaliy Kropachov established a rigid hierarchical structure involving the management of LLC Krasnolymanske, certain officials from the Ministry of Energy, and top executives of the state mine itself. The chief engineer of the SE, who acted as general director, ensured decisions were made in favor of the private business. Furthermore, the server containing the state mine’s accounting database was physically located in Kropachov’s corporate office in Kyiv.
The private company failed to pay the state enterprise for provided services for years. By autumn 2023, the accounts receivable owed by the LLC to the SE reached 2.17 billion UAH. Despite this, the management of the state mine deliberately refrained from initiating any legal claims or recovery actions.
«Instead of settling debts with the state, funds were transferred to questionable entities and paid out as dividends to the parent company Ukrdoninvest—totaling approximately 991.8 million UAH over the 2022–2023 period,» the investigation files state.
A separate episode of the case involves large-scale tax evasion. Despite the expiration of tax exemptions at the beginning of 2022, the chief accountant continued to register invoices under preferential terms. The total tax base on which VAT was uncharged exceeded 852 million UAH, resulting in 170 million UAH losses to the state budget.
The funds siphoned from the coal industry were laundered through LLC Ukrdoninvest, where they accounted for up to 90% of the company’s total income. Subsequently, these funds were used to purchase luxury assets, including:
a non-residential building in Kyiv worth 43 million UAH;
premium vehicles, including a Rolls-Royce Cullinan Black Badge and a Mercedes-Benz EQS;
industrial machinery, server equipment, and charging stations.
The total volume of laundered funds documented by investigators stands at 992 million UAH. The investigation into the suspects and the Ministry of Energy officials who enabled the coal scheme is ongoing. Kropachov’s coal business remains under close scrutiny by anti-corruption authorities.