Danish shipowner Norden is pursuing criminal case against a Ukrainian port agency that has allegedly been issuing fake invoices with inflated fees for at least the past two years.
Stark Shipping has been accused of using fraudulent paperwork in which towage fees were inflated, for which payments were made by unsuspecting shipowners.
However, it still remains unclear who is behind the alleged forgery of the original invoices and overstatement of towage costs, and it is unclear whose accounts received the money.
The allegations were first revealed by Ukrainian towage provider UKR Fleet Service.
As part of its ongoing merger with two other operators, UKR Fleet Service conducted an audit of its business at the ports of Chornomorsk and Odessa, in which it obtained original invoices from its counterparties.
"Stark Shipping was the only agent who completely ignored our reasonable requests to provide such original bills," Ruslan Babikov, director of the towage company, said in an open letter to stakeholders.
UKR Fleet Service applied directly to Norden in June to obtain the documents, which led to the disparity in towage fees being discovered between the originals and those raised by Stark.
Stark has categorically denied the allegations and has filed a libel claim against UKR Fleet Service with the Commercial Court of Odessa, seeking UAH 150,000 ($5,380) in damages.
But the agency has not yet filed copies of evidence being used to support its claim or proof that it has paid court fees, according to legal filings.
If Stark cannot file the requisite information with the court by Friday, its claim will be thrown out, according to a decision by Judge NV Roga.
Now Norden is taking the case further, having completed its own investigation into the allegations.
The company claimed it is owed about $85,000 in inflated towage fees, which were accumulated across 13 port calls in Ukraine for which Stark acted as the charterer's port agent.
Christian Vinther Christensen, head of Norden's dry cargo department, told TradeWinds that his company has engaged its lawyers in Odessa to pursue the criminal action against Stark in Ukraine.
"It seems that Stark Shipping have made fraudulent invoices and we have some proof," he said.
"We have invoices from the tug company and we have copies of the same invoice that we paid to Stark, but the only thing that changed was the amount — so it's a little bit obvious actually."
Pursuing the criminal case is also in the interest of Norden's customers, who eventually end up paying inflated fees when they are priced into freight rates, Christensen said.
"Transparency leads to lower freight rates, which is in the interest of our customers," he said. "We have what we have: a zero tolerance towards fraud and corruption, so it's actually our obligation to act on it and also to be vocal about it."
That the alleged fraud occurred in Ukraine is also significant to Norden, which handles more than 50% of the country's imports and makes 10 to 15 port calls there each month.
Christensen said Norden has received "no meaningful explanation" from Stark regarding the alleged fraud — "just a lot of excuses".
He said he understands that other companies have been affected by the fraudulent activity.
UKR Fleet Service said it has received an "avalanche" of requests from other shipowners, asking to verify towage invoices for port calls for which Stark acted as port agent at Chornomorsk.
The company has collected all of its invoices issued by Stark between 2018 and 2020 and compiled them in a openly accessible Dropbox folder.
Stark response
Konstantin Romashko, director of Stark Shipping Ukraine, told TradeWinds that the allegations brought forward by UKR Fleet Service are "part of unfair competition and [have] nothing to do with truth".
"In response to these false accusations, Stark Shipping categorically and openly declares that no invoices were faked or corrected by us," he said.
Since being established six years ago, the agency has grown to the point where it now handles 800 port calls per year as ship agents in all Ukrainian ports, Romashko said.
He said its success has made Stark a target for unscrupulous competitors.
Romashko claimed the fraud that affected Norden could have been perpetrated by its protective agents in Ukraine, who he said verified all of the shipowner's nominations in the country.
Ironically, Stark Shipping and Norden are both members of the Maritime Anti-Corruption Network (MACN), an association of businesses "working towards the vision of a maritime industry free of corruption", according to its website.
TradeWinds understands that MACN has questioned Stark about the activity.
But the experience has caused Norden, one of MACN's founding members, to re-evaluate the organisation, according to Christensen.
Member criteria
"One of the things we have done immediately of course is to question MACN and the administration of MACN, [asking] what are the criteria for becoming a member here and to investigate this, and Stark Shipping as well because that is, of course, very problematic," he said.
MACN told TradeWinds that it is aware of the allegations against Stark.
“MACN is based on the integrity of its members and we take such matters extremely seriously. That said, until the legal process is complete, it would be premature for us to provide any comments or views on this specific incident until such time,” Cecilia Muller Torbrand, the group's executive director, said.
“Once the conclusions are known, we will take the appropriate action.”