Ukraine received just 3,000 of 100,000 mortar rounds in €35 million deal under investigation in Czechia

Czech police have been investigating the case for two years, with a significant part of the financial transactions traced to Prague, Czech outlet Novinky reported on November 12.

The Ukrainian Defense Ministry paid approximately 855 million Czech koruna (€35 million) in advance to Ukrainian arms supplier Lviv Arsenal in late 2022.

The contract involved Slovak company Sevotech, which held a license to trade military equipment, and a network of companies operating in several European countries.

Nearly four years later, Ukraine has received only 3% of the ammunition it ordered.

Millions withdrawn in cash in Prague

According to Novinky, the money moved through companies in Slovakia, Czechia, Croatia, Bosnia and Herzegovina, Slovenia and Bulgaria.

Sevotech transferred €11.3 million to Croatian company WDG Promet in December 2022.

About half of that amount — nearly 138 million Czech koruna — was subsequently withdrawn in cash from WDG Promet's accounts at a Prague credit union.

Those involved dispute who actually withdrew the money. Croatian arms dealer Zvonko Zubak denies responsibility and says signatures attributed to him were forged, while a former cashier at the credit union has disputed his account.

Czech financial regulators later revoked the credit union's license after identifying serious deficiencies, including failures in safeguards against possible money laundering.

Investigators in Ukraine and Bosnia and Herzegovina also suspect that €5.5 million intended for the ammunition purchase was used to acquire Vitezit, a bankrupt ammunition factory in Bosnia.

Tomislav Zubak, another member of the Croatian arms-dealing family, went on trial in Bosnia in September alongside three other defendants in connection with the factory acquisition. The proceedings involve allegations including money laundering and unlawful possession of weapons or explosives.

Ukrainian arms trader fights extradition

The case also involves Ukrainian arms trader Oleksii Khoroshaiev, a former senior manager at a Ukrainian state-owned arms trading company.

After Russia's full-scale invasion, he moved to Czechia and began arranging military procurement deals for Ukraine.

According to the Slovak owner of Sevotech, Ján Hodermarský, Khoroshaiev was involved in organizing the mortar ammunition contract and planned to acquire a substantial stake in the company.

Czech police detained Khoroshaiev in September 2024 at Ukraine's request. He remains in custody and is contesting extradition while seeking asylum in Czechia.

Ukraine suspects him of embezzlement and organizing the foreign portion of the alleged scheme.

Khoroshaiev denies wrongdoing.

Through his lawyer, he told Novinky that he had neither appropriated money intended for ammunition purchases nor participated in its embezzlement. He attributed responsibility for handling the funds to Croatian business partners.

Criminal proceedings in Ukraine

Five defendants, including two Ukrainian Defense Ministry officials and representatives of Lviv Arsenal, are already on trial in Ukraine.

The Security Service of Ukraine (SBU) told Novinky that seven people were being prosecuted in connection with the case, with two placed on an international wanted list.

If convicted of participating in an organized criminal group, the defendants on trial in Ukraine face prison sentences of seven to 12 years.

A Ukrainian court has also ordered Lviv Arsenal to repay the advance. Including penalties, the company's liability amounts to nearly one billion Czech koruna, according to Novinky.

It remains unclear how much money the Ukrainian Defense Ministry has recovered.

Meanwhile, nearly 97,000 mortar rounds ordered for Ukraine's military remain undelivered.