Suspicious contracts worth hundreds of millions of hryvnias were discovered at Lisy Ukrainy
During an audit of the State Forestry Enterprise “Forests of Ukraine,” the State Audit Service uncovered potential large-scale violations related to the use of private contractors. According to the auditors, a number of companies that received government contracts worth hundreds of millions of hryvnias did not have a sufficient number of employees, and some of them were not actually operating at their registered addresses.
Based on the audit findings, the activities of a group of 12 legal entities were investigated; according to the State Audit Service, the ultimate owner of these entities is a single entrepreneur—a citizen named Babenko—along with his relatives or associates. In 2025 alone, this group signed contracts worth over 450 million hryvnias with branches of the state-owned enterprise “Forests of Ukraine.”
According to Basalaeva, the auditors were unable to locate most of the contractors at their registered addresses.
“During the audit, the State Audit Service found that 11 out of 12 of these companies were not present at their legal or actual addresses—in other words, they were so-called ‘ghost’ companies. It can be assumed that most of the state funds received were subsequently converted into cash,” noted the head of the agency.
The auditors had the most questions after analyzing the work completion reports. In particular, one of the companies reported planting 2.4 million trees in March 2025, despite having only one officially employed staff member, even though regulations require at least 168 people for such work.
“Another company from the same ‘circle’ reported planting 3.5 million trees without having a single employee on staff. Yet, according to regulations, at least 244 employees are required for such work,” Basalaeva emphasized.
In addition, another company with no officially registered staff declared the harvesting of over 21,000 cubic meters of timber, even though, according to regulations, at least 17 professional loggers are required to carry out such a volume of work.
According to Basalayeva, the work was likely actually carried out by local day laborers who were paid in cash without being officially registered or having taxes paid on their wages.
In 2025 alone, branches of the state-owned enterprise “Forests of Ukraine” signed contracts for logging and forestry work worth approximately 10 billion hryvnias, the head of the State Audit Service added. The enterprise paid over 9 billion hryvnias in taxes and fees to budgets at all levels, but Basalayeva believes this figure could have been significantly higher.
“The State Audit Service’s audit demonstrated that: if schemes involving intermediary firms and shell companies for the provision of forestry services were eliminated, the state-owned enterprise’s actual financial results and its contributions to the state budget could be significantly higher. I believe that law enforcement agencies, to whom we will forward the materials, will conduct a proper legal assessment of the effectiveness of the State Enterprise ‘Forests of Ukraine,’” she stated.
Alla Basalaeva, head of the State Audit Service, reported this in an interview with “Glavkom.”
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