Defense Ministry and British investor continue legal battle over ownership of properties in Kyiv
The Defense Ministry maintains that it still owns military quarters and other property located on 0.6 hectares (1.5 acres) of land in central Kyiv that British multi-millionaire Mohammad Zahoor bought nearly a decade ago.
In a response to a Kyiv Post inquiry, the Defense Ministry said it is disputing ownership as part of an overall endeavor to regain property and land that was illegally sold in “previous” years during a period of scaling down.
Specifically, it is trying to re-take six buildings and other structures on 24A Sichovykh Striltsiv (formerly, Artema) Street near Kyiv’s Lviv Square.
“Noteworthy to emphasize is that in previous years the number of Ukrainian Armed Forces units were reduced, so were military installations and separate territorial military camps, which created the conditions for Defense (Ministry) land and funds to be acquired illegally,” Col. Oleksandr Motuzyanyk, acting head of the ministry’s communication and press management department, said.
Zahoor, owner and chairman of ISTIL Group, has called the Defense Ministry’s efforts a “raider” attack and has vowed to fight to keep the property and the land on which it sits for which he paid some $3 million to the city of Kyiv.
On Oct. 22, the Kyiv Economic Court of Appeal will hear Zahoor’s case to reverse a lower court’s ruling that invalidated the contract of sale and purchase of the land plot eight years ago in favor of the Defense Ministry.
The Pakistani-born investor says the properties were in a dilapidated state when they were purchased and that no construction was done there since 2001.
He retrospectively learned that a mysterious company registered in rural Rivne oblast had signed a contract in March 2017 with the Defense Ministry’s construction authority to build a residential complex at the same address – two months before he had registered land ownership upon completing five yearly installment payments to the city.
Three companies had bid for the Defense Ministry’s proposal to build a residential complex on 24A Sichovykh Striltsiv Street. Founded in 2015 in the village of Horodok, Prombud-M won despite having less than $300 in charter capital and none of the required licenses from the State Architectural and Construction Authority.
The company, Prombud-M, had also challenged the land sale to Zahoor’s Parker Plus firm with the economic court and included the Kyiv City Council as a defendant. The Defense Ministry would later join as co-plaintiff.
Zahoor lost the initial land sale and purchase case on May 22 on the eve that the judicial mandate of the presiding judge, Vladyslav Demydov, was due to expire.
“We consider this decision as outrageous and illegal and appealed… it,” Zahoor said.
Before the land was bought, Zahoor first purchased the properties from a third party “that had all the necessary title documents and who had paid around $1 million to the Ministry of Defense for this property,” he said.
The Military Prosecutor’s Office and Defense Ministry along with two private companies challenged the sale immediately. Zahoor eventually won all the court cases related to the properties, which culminated in a Dec. 24, 2009 Supreme Court ruling.
The third party company – Ukraine-Metal Ltd. – that had sold the properties to Zahoor was also sued. It was ordered to pay the equivalent of $900,000 at that time to the Defense Ministry’s construction authority in July 2009 as compensation.
“Overregulation” and the “lack of effective planning coordination” stimulates “subjective decision-making and unaccountability” at the Defense Ministry, said Lada Roslycky of the Independent Defense Anti- Corruption Committee ( NAKO), a corruption watchdog that was established by Ukrainian activists and international experts.
Mohammad Zahoor, chairman of the ISTIL Group, speaks with the Kyiv Post on Sept. 27 in his headquarters on Taras Shevchenko Boulevard near Victory Square. (Kostyantyn Chernichkin)