The bank accounts of the ArcelorMittal steel group in Ukraine have been frozen by a court after a senior company official was charged with tax evasion in the latest attack on the group by authorities.
The multinational company, one of the world’s largest steel producers, is Ukraine’s largest foreign direct investor and has been the subject of several tax inquiries in recent years.
The Luxembourg group bought the Kryviy Rih steelworks, the largest in Ukraine and one of the largest in Europe, from the state for 5.2 billion dollars in 2005. It claims to have injected 4.8 billion more dollars in the country since then.
A Ukrainian court has ruled in favor of a request by the attorney general’s office to freeze accounts, leading to a halt in financial transactions, amid growing fears about a Russian military attack. Russia has deployed more than 100,000 troops near the Ukrainian border and demanded that the United States and NATO accept security commitments barring former Soviet states from joining the Western military alliance and restricting where troops Americans could be stationed in Eastern Europe.
Ukrainian court documents accused the group’s finance director in Ukraine of failing to pay back taxes of 2.24 billion hryvnias ($ 81 million). The allegations are based on investigations by the Counterintelligence Agency Security Service (SBU) and are the latest in a number of court cases and inquiries against the company for tax reasons.
The CFO, who has been appointed by ArcelorMittal as Serhiy Plichko, could not be reached for comment.
But ArcelorMittal, on his behalf, defended him against the charges. Yaryna Klyuchkovska, spokesperson for ArcelorMittal, said tax evasion cases should not fall within the “investigative power of the SBU” and that the Kiev asset freeze order “was based on an individual, not on the company ”.
“The company considers these accusations to be baseless and a clear example of political pressure on a major foreign investor,” said a separate press release from the company.
“Yet criminal charges, in whatever form, are brought against an individual, not against the company. There are currently no civil tax proceedings against ArcelorMittal Kryviy Rih and therefore no legal grounds for freezing the company’s accounts.
Klyuchkovska noted that the company has won previous court decisions related to alleged tax evasion on its behalf and found it curious why a business executive would be targeted individually, which is a criminal, not an administrative matter.
Prosecutors said on their telegram channel, used to broadcast official messages, that their action was aimed at “repairing the damage done to Ukraine’s budget.”