Banknotes of Ukrainian hryvnia are seen in Kiev in this May 23, 2012 file photo. Credit: REUTERS/Gleb Garanich/Files
Special Report: How Scams And Shakedowns Brought Ukraine To Its Knees -- Steve Stecklow, Elizabeth Piper and Oleksandr Akymenko, Reuters
(Reuters) - Late last year, Ukraine’s consumer protection agency began filing lawsuits against Foxtrot, the country’s largest electronics retailer. By early March, Foxtrot faced at least 231 separate suits that demanded fines totaling more than $150 million.
Many of the suits accused the company of minor violations of Ukraine’s labeling law – such as not placing a "quality seal" on tiny memory cards and wafer-thin batteries inside mobile phones. Foxtrot said it placed the seals on the external packaging, which the law also allows.
Viacheslav Povroznick, Foxtrot’s CEO, said agency officials proposed a deal – pay $1 million in cash and the lawsuits would disappear. "We said no," he said. "It was like a kind of extortion." Today, the company still faces a mountain of litigation.
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My Comment: Regular readers of this blog know that I have family members who live and do business Ukraine .... and yes .... it has been a difficult struggle for all of them. With this perspective .... I can sadly say with a great deal of confidence that this Reuters post is spot on .... and it explains why people like myself decided years ago on not doing any business in Ukraine.
The corruption is just unbelievable .... it puts to shame the corruption that exists in places like China and Russia .... and it just destroys the spirit of the entrepreneurial class. I have doubts that the newly elected Ukrainian President will be able to correct this .... the problem and the culture of corruption in Ukraine is pervasive and everywhere .... and as for the billions in aid that have been promised to Ukraine from the West .... unless the entire Ukrainian bureaucracy is dismantled .... this aid money is just going to disappear.
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