Ukrainian shipping giant is sinking amid allegations of mismanagement and corruption risks

By Luca Léry Moffat

Leaked internal documents obtained by the Kyiv Independent indicate that one of Ukraine’s largest state-owned shipping companies is in decline and may be influenced by external interests, offering a rare look at governance failures that continue to affect the country’s state-owned enterprises.

In early May, the Chairman of the Supervisory Board of the Ukrainian Danube Shipping Company (UDP) sent a lengthy letter to the Verkhovna Rada of Ukraine. In it, he raised the alarm about a sharp decline in the company’s activity, attributing it to “corruption that has affected the company’s assets for decades.” The Chairman also stated in the letter that the board’s efforts to clean up the company had faced strong resistance.

A separate document obtained by the Kyiv Independent details an internal investigation alleging that another member of the Supervisory Board had created “significant corruption risks.” However, the investigation was launched four days after the Chairman’s letter was sent, despite examining events that had taken place six months earlier. This delay, together with the inconclusive findings, raises questions about why the company did not investigate the matter earlier and about its overall decision-making process.

UDP is headquartered in southwestern Ukraine at the mouth of the Danube River. The company transports cargo and is involved in shipbuilding and ship repair. The Danube River became a critically important export corridor for Ukrainian grain and iron ore in 2022 after Russia’s months-long blockade of the Black Sea at the beginning of the full-scale invasion.

Barges are loaded with grain at the river port of Reni on the Danube River in Odesa Oblast, Ukraine, on 21 July 2022.

The documents do not make clear who may be trying to disrupt the company’s normal operations or for what purpose. However, UDP’s declining market share, despite its strategic importance, highlights long-standing governance problems at Ukraine’s nearly 3,000 state-owned companies, which reformers and Kyiv’s international partners believe should be corporatized or privatized in order to limit political interference and corruption.

According to the letter and court cases, along with deteriorating financial performance, the company’s profitable assets, including vessels and real estate abroad, had already previously been subject to embezzlement under a pattern similar to that seen at other Ukrainian state-owned enterprises.

In response to these allegations, the Ukrainian Parliament stated that it would react. A letter dated 4 June, sent by the parliamentary committee on transport and infrastructure to UDP Director Volodymyr Tostohan and provided to the Kyiv Independent upon request, notes the Chairman’s concerns. It describes the situation in the company as one that “currently raises significant concern” and “undoubtedly requires a hearing and detailed consideration.”

In an explosive letter to the Ukrainian Parliament dated 6 May, obtained by the Kyiv Independent, Benoît Pleska, Chairman of UDP’s Supervisory Board, paints a dire picture of the company’s decline: falling activity and market share since 2020, “enormous resistance” to the board’s clean-up efforts, chronic corruption and the systematic destruction of the company’s assets.

Pleska concludes the letter by calling for a parliamentary investigation into illegal activities at the company.

The board, appointed in August 2025, consists of three independent appointees, including Pleska, and two members appointed by the state. Independent members are selected through a competitive merit-based process, which often results in foreign professionals being elected to boards.

Citing statistics on the company’s collapse throughout the letter, Pleska argues that the actions taken “indicate a structural management failure, a failure of corporate governance, the destruction of economic value and decisions potentially contrary to the strategic interests of the state.”

For example, while Ukraine’s state-owned Danube port of Izmail recorded extraordinary cargo growth of 314% between 2020 and 2024, UDP’s cargo volumes increased by only 2.1%. As a result, the company’s market share in its key port fell from 18% in 2020 to nearly 4% in 2024.

Pleska says that the Supervisory Board began its work in “extremely difficult financial and operational conditions.”

Data from the Ukrainian open-source intelligence company YouControl indicate a sharp deterioration in financial performance in 2024 and 2025. The company incurred losses of more than USD 7 million in 2025.

“The Supervisory Board is firmly determined to eradicate the corruption that has affected the company’s assets for decades, systematically destroying UDP’s fleet.”

In his letter, Pleska describes attempts by the newly appointed board to reorganize the company, including independent audits, a new financial plan, a full inventory of company assets and the search for new management to replace what he described as the “critically low qualification” of current management.

However, Pleska writes that these actions triggered “enormous resistance from internal and external stakeholders,” including “malicious obstruction of the normal activities of the Supervisory Board” and an “information and outreach campaign” aimed at discrediting him personally.

“Such activities were aimed at distracting members of the Supervisory Board and slowing down the reform of corporate governance at UDP,” Pleska writes.

“However, the Supervisory Board is firmly determined to eradicate the corruption that has affected the company’s assets for decades, systematically destroying UDP’s fleet,” he adds.

In his letter, Pleska cites this resistance to the board’s work as grounds for a parliamentary investigation.

In response to an email from the Kyiv Independent, Pleska confirmed that he had written the letter and that its receipt had been confirmed by “the relevant authorities.” It is unclear which authorities he was referring to.

“The Supervisory Board considered it its duty to inform Parliament because we believed that the problems we identified could significantly affect the future of the company and the implementation of corporate governance reform,” Pleska told the Kyiv Independent, adding that most of its members supported the decision to bring the issue before the Verkhovna Rada.

“I believe that strengthening corporate governance in Ukraine’s state-owned enterprises is essential for the country’s future and for maintaining the trust of its international partners,” he added.

Less than a week after Pleska sent the letter to the Ukrainian Parliament, the company launched an internal investigation. However, the investigation did not address the issues raised by the Chairman of the Supervisory Board. Instead, it focused on an unrelated matter dating back to November 2025.

According to a copy of the investigation’s findings obtained by the Kyiv Independent, the investigation concerned Taras Boichuk, one of the two state representatives on the company’s Supervisory Board, both of whom were directly appointed by the Ministry of Infrastructure, which oversees the company.

The “preliminary fact-finding investigation,” launched on 10 May and completed only two days later, on 12 May, examined what it described as Boichuk’s “unacceptable” conduct — alleged conduct that had taken place six months earlier. The timing and short duration of the investigation suggest that it was launched in response to the letter sent to Parliament, rather than as part of broader efforts to address the alleged problems.

The investigation accuses Boichuk of exceeding his authority on the Supervisory Board by interfering in operational matters.

According to the investigation, at a meeting on 11 November, Boichuk proposed hiring tax lawyer Roman Popov to assist in a USD 17 million tax dispute. He then allegedly instructed company employee Hanna Vyshnevska to provide Popov with case materials without proper authorization. Ultimately, together with Popov, Boichuk allegedly “recommended” cooperation with a list of law firms that could provide additional assistance in the case, with contracts ranging from USD 216,000 to USD 671,000.

The investigation claims that these actions violated company procedures, including rules concerning the authority of Supervisory Board members, access to confidential materials and conflict-of-interest checks. It concludes that Boichuk’s conduct may indicate undisclosed private interests and recommends that an anti-corruption officer conduct a review. The findings were signed by UDP Director Tostohan and five other members of the investigation commission.

“I reject the version of events presented in the so-called Preliminary Fact-Finding Investigation.”

However, the investigation does not assess any damage caused by the transfer of documents to Popov, nor does it determine whether they contained trade secrets or confidential information at all.

The Kyiv Independent contacted Boichuk, who denied giving any instructions or recommendations beyond the authority of a Supervisory Board member, as well as transferring UDP documents to external lawyers in violation of company procedures.

“I acted within my authority as a member of the Supervisory Board and did not commit any violations; on the contrary, I acted in response to an identified risk, which is part of my fiduciary duties,” Boichuk said in an email response to the Kyiv Independent, referring to the company’s deteriorating financial condition and the tax dispute.

The USD 17 million claim cited in the internal investigation exceeds the company’s annual turnover listed on YouControl.

“I reject the version of events presented in the so-called Preliminary Investigation,” he said, telling the Kyiv Independent that he had hired Popov as his personal tax adviser, not on behalf of the company.

Boichuk also claims that he did not instruct anyone to provide Popov with case materials. Rather, Popov, as his personal adviser, advised Boichuk to review the materials himself. Neither he nor Popov recommended cooperation with any law firms, according to Boichuk; he says the company itself initiated the selection process.

Echoing Pleska’s claims that the Supervisory Board is facing resistance, Boichuk stated that the allegations made in the investigation were aimed at “limiting the scope of my rights as a member of the Supervisory Board, in particular my access to information necessary to perform my duties.”

Boichuk also said that the Ministry of Infrastructure had initiated a review of the investigation.

“I am confident that the facts will be clarified in the course of the ongoing review and any subsequent lawful procedures,” Boichuk said.

The Kyiv Independent sent a public information request to the ministry asking it to confirm whether it was aware of the fact-finding mission and to provide any documents related to the investigation. At the time of publication, the ministry was still processing the request.

Popov did not respond to an email request for comment when contacted by the Kyiv Independent. Although Vyshnevska initially answered the first phone call, she did not respond to a follow-up call requesting comment or to a text message.

Pleska’s letter, as well as public records, also indicate several apparent past attempts to strip assets from the Ukrainian Danube Shipping Company.

In 2017, 32 company vessels were allegedly lost as a result of an embezzlement scheme, causing nearly USD 2 million in losses. Ukraine’s Specialized Anti-Corruption Prosecutor’s Office is currently pursuing this case in court.

More recently, the company’s former director, Oleksii Khomiakov, was investigated in connection with an attempted transfer of dozens of UDP-owned vessels to another company in Hungary.

Public records reviewed by the Kyiv Independent show that the Security Service of Ukraine launched an investigation in 2020 and later transferred the case to the National Anti-Corruption Bureau of Ukraine in 2022. Since then, the bureau has not brought charges against Khomiakov and has not concluded that there was any criminal intent regarding the transfer of documents.

Referring to this case in his letter, Pleska says that the situation put more than USD 50 million worth of company assets at risk.

The Kyiv Independent contacted the Ukrainian Danube Shipping Company for comment, but had not received a response by the time of publication

Original of materials : https://kyivindependent.com/exclusive-ukraine-shipping-giant-is-sinking-amid-allegations-of-mismanagement-and-corruption-risks/