Lawyer: ARMA may hide inconvenient information to demonstrate effectiveness

The Asset Recovery and Management Agency (ARMA) may hide inconvenient information to appear more effective on paper than it actually is. This opinion was expressed in an exclusive commentary to UNN by Volodymyr Bohatyr, a lawyer, Honored Lawyer of Ukraine, who emphasized that ARMA reports often contain only numbers favorable to the agency, avoiding mentioning losses or problems.

According to Bohatyry, in 2023, the ARMA reported record-breaking figures – revenues to the state budget amounted to UAH 191 million, of which UAH 101.3 million was income from asset management. However, the lawyer noted that these reports do not take into account significant losses.

“But this is all on paper. For example, the amount of officially recorded losses from the activities of Novoyavorivska and Novorozdilska CHPPs (the enterprises were arrested and transferred to managers by ARMA) in the same record-breaking year of 2023 amounted to UAH 174.6 million. This figure is fully comparable to the declared revenues and completely negates the thesis of self-sufficiency,” emphasized Bohatyr.

The lawyer also expressed doubt that independent auditors, including international ones, would be able to get a complete picture of ARMA’s activities. “People who are far removed from Ukrainian realities are more likely to take the information they are given on faith. And we are very good at compiling reports and attractive infographics,” he said.

According to the lawyer, ARMA’s reports should be subjected to a deeper analysis, and foreign auditors should be provided with access to the full range of information to make a realistic assessment of the agency’s activities.

“We can only guess how much such inconvenient information there is. It is unknown whether foreign auditors will receive it,” he concluded.

Context

Recently, the Accounting Chamber conducted an audit of ARMA for 2022-2023 and the first half of 2024, which revealed significant problems in the management of seized assets. In particular, the auditors emphasized the following problems: imperfect mechanisms for selecting managers and appraisers of confiscated assets; incomplete data on assets in the register; unregulated relations between ARMA and prosecutors and pre-trial investigation agencies.

Transparency International Ukraine notedthat the “disappointing” conclusions of the Accounting Chamber on the results of the audit of the Asset Recovery and Management Agency should become the basis for reforming this body.

Commenting on the Accounting Chamber’s report, Anastasia Radina, the head of the Verkhovna Rada’s anti-corruption committee, said that the management of seized assets remains one of the biggest problems of the Asset Recovery and Management Agency. According to her, during the full-scale war, the state could have lost at least UAH 850 million in income from property management.