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. Last Updated: 07/27/2016

Ukraine Opens 44 Investigations Into Gas

KIEV -- Ukrainian prosecutors have opened 44 criminal cases after an investigation into the natural gas sector found serious violations that might have cost the country hundreds of millions of dollars, officials said Thursday.

The Prosecutor General's Office accused state gas companies of issuing licenses illegally, selling natural gas that had been intended for the population to commercial businesses, illegally writing off debts and buying themselves expensive cars with public funds. The probe focused on state-owned gas monopoly Naftogaz, its daughter company Nadra Ukraina and other gas enterprises.

Naftogaz refused to comment on the allegations.

Prosecutors say that, instead of supplying the Ukrainian population with Ukraine's own natural gas, Naftogaz and its daughter companies used more expensive imported gas, at a loss of 1.3 billion hryvna ($258 million) to the state. The gas produced in Ukraine was instead gobbled up by private industrial companies.

Prosecutors also say contracts were signed giving private companies unfair access to Ukraine's natural resources in exchange for promised investment in the sector that never materialized. Of 64 contracts that Nadra Ukraina signed with other companies, 21 were never fulfilled, and of 2.2 billion hryvna promised in investments, only 18 percent was received, prosecutors said in a statement.

Other allegations include writing off gas debts and allowing companies to carry out gas exploration work without licenses.