Employees from a Ukrainian arms firm conspired with defence ministry officials to embezzle more than £31m earmarked to buy 100,000 mortar shells, the Ukrainian security service has said.
The SBU said five people have been charged and if found guilty, they could face up to 12 years in prison.
The investigation comes as Kyiv attempts to clamp down on corruption in a bid to speed up its membership in the European Union and NATO.
The investigation dates back to August 2022, when officials signed a contract for artillery shells worth 1.5bn hryvnias (£31.1m) with arms firm Lviv Arsenal, security officials said.
After receiving payment, company employees were supposed to transfer the funds to a business registered abroad, which would then deliver the ammunition to Ukraine.
But the goods were never delivered and the money was instead sent to various accounts in Ukraine and the Balkans, investigators said.
Ukraine’s prosecutor general said the funds have since been seized and will be returned to the country’s defence budget.
Volodymyr Zelenskyy was elected on an anti-corruption platform in 2019 and has portrayed sacking top officials as proof of his administration’s efforts to crack down on corruption.
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