Multi-Billion Som Embezzlement Uncovered at Shurtan Gas Chemical Complex

Another major and high-profile crime has been exposed in our country as part of ongoing efforts to combat corruption and ensure the targeted use of budget funds. Employees of the Department for Combating Economic Crimes under the Prosecutor General’s Office and the Compliance and Anti-Corruption Control Department of the Tax Committee jointly conducted a pre-investigation inquiry into an extremely large-scale financial violation.

During these inquiries, a massive "financial scheme" involving responsible officials from several state organizations and private enterprises was uncovered.

Collusion by officials and a fraudulent VAT scheme

It was determined that officials from the Tax Committee, the Bukhara Regional Tax Department, Uzbekneftegaz JSC, as well as Sh.G. LLC, the S.E. LLC joint venture, A. LLC, and the permanent establishment of the E.E. LLC joint venture in Uzbekistan had conspired in advance to devise a criminal plan.

Specifically, services rendered under the project to further expand the production capacity of the Shurtan Gas Chemical Complex, worth 5.3 trillion soms, were fully exempt from value-added tax (VAT) under current legislation. However, members of the group illegally included this VAT amount in electronic invoices, managing to create the appearance of legitimate VAT funds in the state budget.

Scale of the massive damage caused to the budget

Funds generated through these fraudulent and illegal actions were directed toward the following purposes:

• Artificially created funds were illegally refunded to the bank account of A. LLC.

• The S.E. LLC joint venture’s substantial existing creditor debt to the state was completely eliminated (written off) through fraudulent means.

As a result of this scheme, it has been officially proven that responsible persons misappropriated and embezzled state and budget funds totaling 643.2 billion soms, an exceptionally large amount, through misappropriation and embezzlement.

Rule of law: Criminal case initiated

In connection with this case, a criminal proceeding has been initiated under the Criminal Code of the Republic of Uzbekistan against all individuals guilty of betraying state funds and committing financial fraud, pursuant to Article 167 (Misappropriation or embezzlement) of the Criminal Code.

Strict investigative measures are currently underway to establish all details of the case and fully recover the damage caused to the state.

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