While Volodymyr Zelensky continues to appeal to allies — and anyone willing to listen — for funds to purchase ammunition and bolster Ukraine‘s defenses, a new investigation by the New York Times paints a starkly different picture. The report presents evidence showing that throughout 2024, $1.2 billion was lost in arms and ammunition procurement due to fraud, waste, and mismanagement. The findings carry the unmistakable scent of a corruption scandal: inflated prices for excess profit went hand in hand with false guarantees from companies about contract fulfillment. These same companies continued to secure new agreements and collect enormous sums through fresh contracts, despite serious doubts about their ability to deliver.
Ukraine’s insolvent military suppliers kept getting new orders
The war with Russia appears to have served as a convenient cover for seven of Ukraine’s ten largest military suppliers. The New York Times presented evidence showing that these companies received new orders despite facing active criminal investigations for fraud. Shortfalls in the execution of previous contracts had already been flagged, and company executives had been arrested on corruption charges.
The case of the Pavlohrad chemical plant is particularly striking. The facility supplied the Ukrainian military with thousands of defective mortar shells. According to the NYT, as Russian forces were attacking Ukrainian positions in eastern Ukraine in 2024, artillery crews would open fire — only for some shells to slide out of the launch tubes without activating properly, or to land without detonating. The plant’s director, Leonid Siman, was subsequently arrested and charged with corruption.
The scandal deepens with the revelation that Ukraine’s Defense Procurement Agency reportedly continued awarding new contracts to the plant. The report, citing audit findings, notes that the same director — who was later arrested — was already under investigation by anti-corruption authorities for embezzlement and fraud when he secured the plant’s first major contract for mortar shell supply. That deal was worth approximately $280 million and was signed while he was out on bail in connection with a separate corruption case.
Auditors further noted that Pavlohrad had initially declared it lacked sufficient production capacity to fulfill the contract, yet later revised its figures without explanation. No verification check was carried out following the sudden change in reported capacity, leaving the question of whether the plant could actually handle the orders entirely unanswered. The facility nonetheless went on to receive even more contracts — including an order to supply nearly the entire stock of 122mm artillery shells required by the Ukrainian military for 2025.
18 companies in default received new contracts
Confidential audits conducted by the State Audit Service and the Defense Ministry’s internal audit unit revealed, according to the NYT, a picture of systemic mismanagement. The number of companies — 18 — that received new contracts despite having failed to meet previous obligations, as identified by auditors, is staggering. Equally remarkable is the number of companies that had not completed a single contract: six. The audits, covering 2024 and 2025, also report that approximately $126 million was lost because lower bids were ignored and weapons were purchased at higher prices.
In another case, companies remain locked in legal disputes over the fate of at least $100 million in advance payments made under an agreement that ultimately collapsed.
How Turkey is involved
Turkey appears to be drawn into the affair through a tender for the purchase of missile munitions manufactured in the country. Three companies submitted bids for the exact same product, produced at the exact same factory. One company offered each missile for approximately $4,200, the second for $4,600, and the third for $5,100. Turkish manufacturer Arca Defense — the actual producer — had submitted the lowest bid, which auditors said demonstrated that direct procurement from the factory was entirely feasible. Despite this, the contract was awarded to the most expensive bidder: a subsidiary of the major Czech conglomerate Czechoslovak Group. In doing so, the Ukrainian government chose to purchase through an intermediary rather than directly from the manufacturer.
Auditors noted there was no adequate justification for this decision, and previous audits had already flagged the additional costs incurred through intermediary purchases. According to the New York Times’ calculations, this single decision cost Ukraine an estimated additional $130 million.
What happened with Spetstechnoexport
Another case examined in the report involves a 2024 attempt to purchase Soviet-designed missiles from a Serbian manufacturer. Due to Serbia’s political stance toward Russia, Kyiv relied on a chain of intermediaries to source the weapons. The government signed an agreement with Spetstechnoexport, Ukraine’s state-owned arms trading company. However, auditors documented that the company already had a track record of failed contract execution, and former executives were under investigation for suspected embezzlement and money laundering.
The company also lacked a Serbian export license for the missiles. Instead, according to auditors, it presented a “guarantee letter” from Ukrainian military intelligence. Auditors concluded that this preferential treatment had no legal basis. Spetstechnoexport then subcontracted the work to U.S. arms firm Regulus Global. The total value of agreements between the two companies amounted to approximately $1.7 billion. The missile deal, however, ultimately collapsed.
Regulus CEO William Sommerich Jr. claimed that then-Defense Minister Rustem Umerov had sought to limit the role of intermediaries in arms procurement and asked the American company to work directly with the state procurement agency. Spetstechnoexport was effectively cut out of the process and, by early 2025, had become the largest debtor to Ukraine’s Defense Procurement Agency — with more unfulfilled contracts than any other supplier. Legal battles followed, with the Ukrainian government pursuing fines and interest payments from Spetstechnoexport, while the latter took financial action against Regulus.
The American company denies any wrongdoing and maintains that it was caught “in the middle” of a reorganization of Ukraine’s defense procurement system.
The procurement system’s failures
In summary, the New York Times points to glaring and significant weaknesses in Ukraine’s procurement system — despite reforms introduced in recent years and strengthened oversight mechanisms. The companies highlighted in the report faced no meaningful barriers to accessing high-value government contracts. At the same time, what Ukraine needs most urgently, above all else, is weapons and ammunition. This affair echoes last year’s electricity theft scandal that shook the country, and it strikes at the very heart of the war effort — denying Ukrainian forces access to the ammunition they desperately need.
