MacPaw searches: A "blamestorming" after the first visit of enforcers back in 2021. How did it all begin?
How a tractor, a forestry fund, and the investment climate came together in one case
On February 15, in Ukraine, notorious searches were carried out at the MacPaw office and at its founder and CEO, Oleksandr Kosovan's, home. The event resonated because investigators came to one of the largest product IT companies, whose products are used by more than 30 million consumers, mostly in the US. Well-known entrepreneurs immediately unleashed a wave of hate on social media about the "wonderful" investment climate in Ukraine. Even the head of the Ministry of Finance, Mykhailo Fedorov, did not stand aside.
In Kosovan's version, "the reason for the searches was the desire of officials to grab the land plots that MacPaw legally acquired between 2016 and 2021."
According to the National Police, it was all about the sand: "It has been established that illegal mining is being carried out on the territory of the land plots ... for the construction of a recreation complex. The pre-trial investigation is being conducted on increasing the coastline bordering the land plots without a special permit. As a result of such activity, the state suffered losses of more than UAH 12.5 million."
What was really going on? Mind tried to find the answer to this question in the court register, which already contains more than 10 different rulings and decisions in the case. We retell the tragicomic story in human language and in chronological order.
July 7, 2021. The deputy chief of the Boryspil Rayon Police Department No. 1 of the Kyiv Oblast Main Police Department receives a search warrant for MacPaw's private property, an 11.2-hectare plot near the Kaniv Reservoir. The purpose of the search is to "detect and seize a dredger and a MANITOU tractor used for illegal sand dumping on a particularly large scale."
The investigator also assures the judge that the village head of the Tsyblyvska Amalgamated Territorial Community said during the interrogation that this plot belongs to forestry fund and was illegally transferred to private ownership.
Therefore, detectives initiated criminal proceedings under two articles. The first was Part 2 of Art. 239-2 (sand alluviation committed repeatedly or by prior conspiracy by a group of persons). The second was Article 364(1) of the Criminal Code of Ukraine (on abusing their office by officials when transferring forest fund lands to private ownership). The investigator does not say which persons or which government agency did this. Subsequently, other rulings implicate employees of the State Geocadastre in Kyiv Oblast, but do not list the individuals. Currently, there is no decision to bring them to justice in the court register.
October 13, 2021. The investigator receives a similar ruling. He assures the judge that on July 8, the first search was conducted at the site, but the dredger and tractor were not found. So they had to do it again: On October 8, eight citizens allegedly filed a statement that there was a dredger on the shore. It is not clear from the case file how this search ended or whether it ever took place: the investigators never mentioned it again.
Both rulings were signed by the of the Pereyaslav-Khmelnytsky Town District Court of Kyiv Oblast judicial investigator. Then the case went "higher."
January 13, 2022. The senior major case investigator from the Department of the Main Investigation Directorate of the National Police of Ukraine receives a warrant from a judge of the Pechersk District Court of Kyiv – no, not for a search, but for an inspection of the land. The purpose is somewhat vague: "to establish the objective truth" involving employees of the State Ecological Inspectorate, the State Service of Geology and Subsoil of Ukraine and "to seize samples of minerals for forensic examinations."
January 21, 2022. History repeats itself. The senior investigator again receives permission to inspect. But not only the 11-hectare plot, but also six others nearby, where "the construction of the IT-Relax recreation complex is underway." However, the investigators only have complaints about the first one, which was supposed to be inspected earlier. The investigator does not tell the judge what went wrong this time.
February 24, 2022. The full-scale invasion begins. Forensic scientists temporarily forget about the sand.
May 25, 2022. The issue becomes an economic one. The head of the Boryspil District Prosecutor's Office in Kyiv Oblast asks the court to cancel MacPaw's private property rights to two plots (1.19 hectares and 0.86 hectares) and return them to the state. The prosecutor assures the judge that this forestry fund land was excluded from the state ownership without the owner's consent. He does not explain how the transaction occurred.
The judge of the Commercial Court of Kyiv Oblast returns the lawsuit. But not because there is no evidence. The reason is different: the statement contains several claims, and this is not allowed.
July 14, 2022. The prosecutor files a lawsuit with the Northern Commercial Court of Appeal.
July 26, 2022. The judge dismisses the appeal because the prosecutor has not paid the court fee (UAH 2481). In early August, the judge finally accepts the new text of the appeal, which was submitted without violations. However, there is still no decision on the consideration of the case in the court register.
August 1, 2022. The Sviatoshynsky District Court of Kyiv considers MacPaw's lawsuit against the State Geocadastre in Kyiv Oblast. The text of the court decision is almost 50,000 characters long. The long story short: the court declared unlawful and cancelled three resolutions of the StateGeoCadastre, which referred to bringing MacPaw to administrative responsibility under Article 53 of the Code of Administrative Offences (violation of land use rules). The court examined the data collected by investigators during "inspections'' of seven plots and sided with MacPaw.
August 31, 2022. Criminologists are back in the "game", though from a different unit. The senior investigator of the Kyiv Oblast Main Office of the National Police receives permission to inspect one of the plots (0.949 hectares) that is subleased to MacPaw. It turned out that in October 2021, another criminal proceeding was opened under Part 2 of Art. 364 of the Criminal Code (abuse of power or office that caused grave consequences).
The investigator assured the judge that back in 2013, officials of the State Geocadastre of Ukraine, Pereiaslav-Khmelnytsky Forestry, Kyiv Oblast and Kyiv City Forestry and Hunting Department, in collusion with officials of the Pereyaslav-Khmelnytsky District State Administration and Pereyaslav Fish Club LLC, "organised an illegal mechanism for withdrawing a forest land plot from state ownership."
Why was the case opened eight years after the alleged violation? The investigator does not say. Why inspect the site in 2022? "To identify and record information about the circumstances of the criminal offense," the decision says.
October 3, 2022. The Svyatoshynskyi District Court, at the request of the prosecutor of the Kyiv Oblast Prosecutor's Office, seizes the property and bans its use. It is about two plots of 0.949 hectares each, which are subleased to MacPaw. The land is "recognized as material evidence in this criminal proceeding."
December 1, 2022. MacPaw files a complaint. The Kyiv Court of Appeal lifts the seizure of the property and initiates a new trial in the court of first instance.
February 15, 2023. Investigators from the Specialised Environmental Prosecutor's Office of the Prosecutor General's Office and the Main Investigation Directorate of the National Police visit MacPaw's office and Kosovan's house. The search warrant has not yet been registered. The National Police assures that the purpose of the "visit" is to search for documents that the company did not provide upon request.
Oleksandr Kosovan claims the opposite: the company has responded to absolutely all requests and provided all the necessary documents.
"We acquired all the land plots legally. And the fact that we are accused of mining is absurd and part of a bigger picture, which I will talk about publicly later. We will continue to resolve this situation exclusively in the legal field. We have not participated and will not participate in corruption schemes," emphasises the founder of MacPaw.
Mind's conclusion. More questions have arisen after reading more than a hundred pages of court decisions. So far, the testimonies of the "parties to the conflict" are completely different. Investigators claim that MacPaw did not have a licence to wash sand. Kosovan considers these accusations absurd. The enforers say that the forest fund's land was illegally changed to another purpose. MacPaw's CEO claims that the plots were bought legally. It is not known from whom the company purchased the land and how many times it was resold before the deal. Some plots are owned by the village authorities and subleased to MacPaw. Why there are no lawsuits against the local authorities is another mystery.
In Ukraine, many recreation centres and private houses were built in the forests near the coastline with fences running " straight into the water." Sandwashing is also common. However, not all of these actions are illegal. What criteria do enforcers apply to decide who to "nightmarise" and who to "ignore"? Why wasn't the case brought to court in 2021, after the search, when investigators were supposed to find evidence of sandwashing? How could the lawyers of a large company have missed that they were buying land that had been illegally withdrawn from the forest fund? Why was the second criminal proceeding opened not in 2013, but after the recreation centre had been constructed? Or it is actually about the corruption schemes that Kosovan hints at?
UPDATED: After the piece was published, Oleksandr Kosovan presented his version of the events in detail. In his words, the idea to develop the project of a "recreation town for IT people" came to MacPaw after the Revolution of Dignity, and the search for land began. A suitable option was found on the shore of the Kaniv Reservoir. "Starting in 2016-17, we signed several purchase and sale agreements for these plots and several sublease agreements. The company acquired these plots at market price without any pre-agreements or kickbacks. At the time of purchase, there were no claims against the plots. There were also no investigations into their allocation. At the time of the purchase, there were investigators' decisions to close two cases related to the plots, but they were resolved and closed due to the absence of a crime. But for some reason, after we acquired the land plots, they decided to return to the same facts and began to open criminal cases (currently there are four of them, all with claims against MacPaw)," Kosovan wrote on his Facebook page.
Mind follows the situation and sends inquiries to the company and the law enforcement
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