English translation

How the Volyn medical “family” makes money on tenders and how much
they make
12.08.2014, 11:15
Valentyna Kuts, Yuriy Horbach, Fourth Power portal
On March 2014, Ivan Sydor signed a resignation letter, but stayed at his post. Just like the tender schemes
that remain today. Apparently the “cover” is too strong (Diagram: Fourth Power)
Volyn Regional Clinical Hospital Chief Doctor Ivan Sydor constantly complains about the insufficient
financing of his institution. Regardless of that, the hospital regularly holds tenders, during which a
company connected to the son of this chief doctor is winning with suspicious frequency. This same
company rents space for its pharmacies in the buildings of the communal hospital at non-market
prices. Even after a “revolution of dignity,” this scheme continues to work.
Fourth Power journalists investigated whether it is true that the business of the chief doctor’s family is
connected to his position.
Post-Maidan tender is again won by “their own” company
At a time when extortion continues in the hospital and neither doctors nor the administration publicly talk
about the need for reform or lobby for changes in the health care system, tender schemes continue to work
well for their own people.
One of the last tenders conducted by the Volyn Regional Clinical Hospital took place in June of this year.
UAH 1.5 million went to a company connected to the chief doctor of this hospital.
Private enterprise Alteia-Farm won the tender. The director of this company, Viktor Kozytskyi, is also the
director of two other companies, Intervoice Ltd. and Grand Capital Ltd. The founder of the former company is
Larysa Sydor and of the latter company is Yaroslav Sydor. This is the wife and son of Chief Doctor Ivan
Sydor, respectively.
According to the results of the tender, the agreement between the Volyn Regional Clinical Hospital and
Alteia-Farm was signed on June 16. According to the agreement, the company has to provide the hospital
with 98 itemized medical tools and equipment for UAH 1,645,325.
The only competitor to the winning company was Mega-Specter Ltd. It was registered at an address not far
from the regional hospital, 15 Hulaka-Artemovskoho St., Lutsk and its founder was Vasyl Yablonskiy. The
price bid by this company was higher than the bid from Alteia-Farm – approximately half a million hryvnyas
more.
Fourth Power talked to the participants of the tender that were fighting for budget financing.
Dmytro Klymuk, head of Mega-Specter Ltd., said that it was their first time participating in a tender by the
regional hospital. As to his competitor, Alteia-Farm, Klymuk did not say much, other than the fact that this
company always “works” in the regional hospital – it has its own pharmacies there and often wins tenders.
The winner of these open tenders did not want to talk much either. Viktor Kozytskiy, director of AlteiaFarm, advised journalists to read about these tenders on the state purchasing website and did not share
much else. However, he did mention one interesting point – the company itself does not have a production
facility and owns only a chain of pharmacies.
- Q: How often do you participate in the tenders of medical institutions?
- Kozytskiy: Regularly.
- Does your company deal only with supplying medical products or also with production?
- No, we are not a producer. We have a chain of pharmacies.
- How often do you manage to win tenders?
- Very rarely. There is very strong competition. We have participated, but in 70% of cases we did not win.
- Do you also participate in tenders outside of this region?
- No, we do not.
- So you have strong competition in Volyn region?
- Of course. If you check on the information, you will see that a great number of companies with various
products are participating in tenders right now, which is why we cannot beat the competition sometimes.
Our conversation was too short: the head of the company either did not hear the questions, kept asking why
the journalist needed all of this information, or kept asking if he was being recorded.
Alteia-Farm won only in the regional hospital
In state tenders, the Volyn Regional Hospital has been represented by Vira Marchuk, who has been head
of the tender committee for many years.
- Q: Please tell us about the fact that half a year has passed already, but the tender for the supply of
medications for 2014 only took place recently.
- Marchuk: Now we finally are working directly in accordance with agreements and can buy everything like
that.
- But the agreement for these purchases was only signed on June 16?
- Yes, that is correct because the prices have been changing. One tender was announced, but never took
place, then at another one there was only one bidder, or something else happened. Tenders take a lot of
time. Such events have been happening in Ukraine and prices have been changing so bidders cannot file
applications. Right now all of our tenders have been completed and we are working.
- And the purchase of medications for UAH 1.5 million – is it for the full year or only the remaining
half year?
- For the full year. Until the tender took place, the hospital was working in accordance with one-off
agreements.
- In this tender there were only two participants. Why did you choose Alteia-Farm?
- This was an open auction; everything was publicized. We selected the lowest price. There was Alteia-Farm
and one more company – I don’t even remember its name. I deal not only with tenders. I am a doctor.
- Alteia-Farm has won many tenders in 2009-2014. Have there been tenders where Alteia-Farm lost?
- All of our auctions where this company won were open. So we conduct open tenders and wish that we
could have 15-20 participants. However, often companies would look but not apply. This year we had
problems with tenders – many of them were cancelled because either there was only one participant or no
participants. Moreover, during the process of conducting tenders, the legislation changed.
- Please tell us, has there been a case when this company lost a tender?
- I don’t remember. I don’t give such information over the phone.
This year’s tender is not Alteia-Farm’s first success. This company has been winning tenders at the Volyn
Regional Clinical Hospital since 2009. In the last five years, this medical institution, according to tenders,
signed 16 agreements with this company for a total amount of UAH 9.850 million.
Purchases through this company varied – from medications to medical equipment. What is interesting,
according to information from the “State Purchasing Newsletter” is that this company has won tenders only
in the Volyn Regional Clinical Hospital.
In order to filter out producers of medical equipment and decrease the
amount of participants – a lot is created of various products
In tenders in the regional hospital, Alteia-Farm did have competition.
For example, in four tenders it competed against Zakhidmedinvest Ltd., which was coincidentally registered
at an address 100 meters away from the hospital (20 Hulaka-Artemovskoho St., Lutsk). At present, while its
current office space is being remodeled, it is located in the same office building as Mega-Specter Ltd. at the
address 15 Hulaka-Artemovskoho St. The founder of the company is Ivan Lesyuk. In a conversation with
journalists, the deputy director of this company said that now it is very hard to win a tender in the regional
hospital.
- We know about each other, but we are two different companies - said Oleksiy, deputy director of
Zakhidmedinvest Ltd. (he refused to provide his last name), of his neighbor Mega-Specter Ltd.
Table of tenders of Alteia-Farm:
He said that his company does not just participate in
tenders in Volyn region. When they have tried to win
tenders in the Volyn regional hospital, they have had
no luck. He does not have any complaints about the
procedure for the tender. However, he did note that
sometimes there were situations when it seemed that
they wanted to limit possible participants for the tender.
- Recently, there were two tenders – said Oleksiy. –
We did not participate in them because in just one lot
they requested laboratory equipment together with
medications. We do not have medications, which is
why we could not participate. Sometimes there are
cases when we consider requested lots, because we
can supply everything. Then they later add one or two
items to their list that we cannot supply and do not
have licenses for, which is why we end up not
participating.
Reading through the “State Purchasing Newsletter,” we
can see that in almost all tenders where Alteia-Farm
won there were only two participants and only one
tender had three participants.
Tenders play out between “their own”
companies
Not only has the tender in June for UAH 1.5 million
looked suspicious.
In March 2013, in a tender in the Volyn Regional
Clinical Hospital, there were two participant
companies: Alteia-Farm, which ended up winning the
tender and signing agreements for more than UAH 2.2
million, and Remedical Ltd. The latter company has a
set of pharmacies in Lutsk and Lviv. There are three of
these Kiwi pharmacies (author: previously Nature of
Purity) in Lutsk and one in Lviv.
Among the founders of Remedical Ltd. were Ruslan
Stepanchuk, Raisa Dolik and Larysa Sydor, wife of
the chief doctor of the regional hospital. When the
tender took place, Larysa Sydor was not named as a
founder.
The company’s statutory fund was UAH 2.350 million. According to Ivan Sydor, chief doctor, both AlteiaFarm Ltd and Remedical Ltd are being managed by his son Yaroslav.
We asked the companies themselves and the son of the chief doctor, Yaroslav Sydor, how it happened that
these two companies played out the two tenders for UAH 2.2 million between themselves. However, nobody
at Remedical Ltd. wanted to talk about our preliminarily stated questions for almost two weeks. Alteia-Farm
claimed that its managers were absent and that nobody could talk. Ivan Sydor said that his son Yaroslav
Sydor was abroad. The companies refused to provide a contact phone number for him.
Olha Veretilnyk, lawyer from the Center Fighting Corruption, said that in this situation there is obvious
evidence of anticompetitive coordinated action between the tender participants.
- Veretilnyk: In this case, we saw anticompetitive coordinated action between the tender participants that led
to the distortion of the results of the tender (collusion), aaccording to point 4, part 2, article 6 of the Law of
Ukraine “On Protection of Economic Competitiveness,” wherein two legal entities constantly bid against each
other in tenders and the management of these legal entities have conflicts of interest. However, there is no
direct connection between article 1 of the Law of Ukraine “On the Protection of Economic Competitiveness”
and the participants of this tender.
Olha Veretilnyk said also that uniting a large number of items in a tender lot can be done on purpose in
order to limit the amount of companies that can participate in the tender.
- The lot had 98 items of equipment from various spheres – syringes, gynecological sets and heart valves –
all in one lot. This significantly limits the amount of companies that can participate in tenders and especially
excludes the direct producers of these supplies. According to part 3, article 22 of the Law of Ukraine “On
Conducting State Purchases,” the documents for tenders cannot have requirements that limit
competitiveness and lead to the discrimination of participants.
According to Olha Veretilnyk, if it is proven that the participants took anticompetitive actions, which led to the
distortion of the tender, then the participants should be subject to the following responsibilities:
The Antimonopoly Committee can recommend to:
1) terminate the agreement;
2) issue a fine (in an amount of up to 10% of the revenue of the company from the sales of products in the
last reporting year that was before the year in which it was fined – article 52 of the Law of Ukraine “On the
Protection of Economic Competitiveness”);
3) ban against the people that are charged with distorting the results of tenders cannot participate in state
purchases for three years (point 3, part 1, article 17 of the Law of Ukraine “On Conducting State
Purchases”).
If a checkup proves that legislation was violated in the area of state purchases, the State Financial
Inspection can issue a fine to the members of the tender committee, according to article 164-14 of the Code
of Ukraine on Administrative Violations – of from UAH 11,900 to UAH 17,000. The Ministry of Economic
Development can only recommend to eliminate the violations revealed during the checkup and can inform
the Financial Inspecion and the Prosecutor.
Not just the tenders. The company of the chief doctor’s son rented
hospital space
Alteia-Farm has been renting three office spaces on the territory of the Volyn Regional Clinical Hospital and
its branch for a few years already. Even the chief doctor of the regional hospital himself does not hide this
fact.
Renters of space in the regional hospital:
Alteia-Farm rents two office spaces of 18 m2 and 33.5
m2 on the first floor of the Volyn Regional Clinical
Hospital and one office space of 21.71 m2 on the third
floor in another branch of the same hospital in the
village Boholyuby near Lutsk.
It is very interesting to look at the rental prices for these
spaces. For example, Alteia-Farm paid UAH 639 per
month for the 33.5 m2 space on the first floor of the
regional hospital from October 2011-February 2014. For
one year, the company should have paid UAH 7,640 to
rent this space.
In March 2014, the rental agreement was resigned.
Now the company will pay almost UAH 785 per month (UAH 9,419 per year).
For the other 18 m2 space on the first floor of the therapeutic building of the regional hospital, the company
paid UAH 180 per month from 2009 to 2013. The agreement was resigned in 2013 and now the rental price
for this space is a little bit more than UAH 325 per month.
For the almost 22 m2 space on the third floor of the treatment-diagnostic building of the Volyn Regional
Clinical Hospital in the village Boholyuby, Alteia-Farm has been paying UAH 108.55 per month since 2010.
The agreement was resigned in August 2013 and now the rental price is UAH 414 per month. The rental
payment sum is stated without VAT.
The pharmacy spaces rented to Alteia-Farm are located in places in high patient traffic areas, which
obviously results in pretty good income.
Family business
How can Alteia-Farm’s brilliant success in state tenders be explained? Ivan Sydor, chief doctor of the
regional hospital, helped us find an answer to this question. In an inverview with Fourth Power journalists,
Mr. Sydor partially explained the situation with the family business and rented spaces.
- Q: Articles have been written that your son has a pharmacy business.
- Ivan Sydor: I know what you are getting at. There is the company Alteia. I am not related to it. We just
arrange for rent. The company Gedeon Richter has 2-3 pharmacies (author: these are located in the building
of the hospital), Mr. Pivnyuk (author: company Volynfarmpostach) has 2-3 pharmachies, Salve has 4
pharmacies, Astron has a pharmacy, etc. This is about six companies that have 12 pharmacies. And my son
has two pharmacies. Rent is arranged for officially; I am not involved and do not participate in that.
- These pharmacies are here on the territory of the hospital?
- No. Here there are only two kiosks. The company does not have any here. Out of 12 pharmacies, my son
has two and they pay rent.
- So which pharmacies does your son have? What are their names?
- Well, Alteia, Alteia-Farm.
According to information from the Single Register of Companies and Organizations of Ukraine, the founder
of Alteia-Farm is Oksana Hedz and the manager is Viktor Kozytskyi, who is also named as the manager of
other companies of the Sydor family: Grand Capital Ltd. and Intervoice Ltd.
We asked Ivan Sydor if maybe they own more.
- So these are the only ones or are there more companies? We have information about the Kiwi
pharmacy network…
- I don’t even know. Kiwi is on Shopena Street. He purchased it since he worked there (author: referring to
son Yaroslav). It is his pharmacy; he privately owns it. Nothing is concealed. Here in our hospital he rents
space for just two.
- And is your wife also involved in business?
- No, she is not involved. She is a psychiatrist, retired. She is not involved. I am not involved in business.
That is for sure.
- We found information that she is the co-founder of four companies.
- A-a-a. Maybe these are my son’s. She hasn’t worked for 10 years. Maybe she is together somewhere in my
son’s companies. Long ago before she retired she worked there. It was a private company and she does
some business there. I, for example, don’t know anything about what he is doing (author: referring to the
son).
- Your wife is the founder of two companies whose activity is renting property.
- Why don’t you go to his company and ask there? They will show you everything and tell you everything. It
is his mother and he involved her in this.
- But he is doing everything?
- Of course. I am not involved in that business – that is for sure. I don’t know about her, what she is doing
and where she is doing it.
Real estate. Cigarettes. Products.
As it appears, pharmacies are not the Sydor family’s only business. The range of their business interests is
pretty wide: from cigarettes to real estate.
Besides the fact that Ivan Sydor and his wife have worked most of their careers in institutions funded from
the state budget, their son became a doctor and tried working as one. The entire family managed to build a
pretty good business.
Even though Ivan Sydor said that he does not have any businesses, he is registered as the founder of a
Volyn company – small private enterprise Rodys, which supposedly provided certain commercial services. At
the end of 2013, Volyn Regional Administrative Court terminated the activity of legal entity/small private
enterprise Rodys because it was not present at its registered address.
Court verdict in the case of small private enterprise Rodys
Ivan Sydor’s son Yaroslav and wife Larysa do much more serious business. Both are the founders of six
companies. However, according to the chief doctor of the biggest hospital in Volyn region, it is the son who
does all of the business and his wife is already retired.
Until recently, the son of Ivan Mykolaiovych Sydor, Yaroslav had the large pharmacy network Salve.
According to his father, he sold it. It is currently stated that the owner of this network is Ukrapteka Ltd., which
has a registered address in Great Britain and statutory fund of UAH 18.5 million.
Currently one of the most important companies of the Sydor family is Remedical Ltd., which we mentioned
above that trades pharmaceutical products. This company has a chain of pharmacies in Lutsk and Lviv.
These are the Kiwi pharmacies (author: previously - Nature of Purity) – there are three in Lutsk and one in
Lviv. The founders of Remedical Ltd. are Ruslan Stepanchuk, Raisa Dolik and Larysa Sydor. The statutory
fund of the company is UAH 2.350 million.
The Sydor business family also has Global Tobacco International Ltd., which has a statutory fund of UAH
5 million. This company is registered in the village Strumivka near Lutsk. Its founders include the same
Ruslan Stepanchuk, Bohuslav Chernek and Ivan Sydor’s wife, Larysa. The company is involved in the
production and trade of tobacco products.
The Sydor family also has two more companies that deal with renting and selling real estate. Vin-Vin Ltd.
has a statutory fund of UAH 485,000 and its founders are Ruslan Stepanchuk, Raisa Dolik and Larysa
Sydor. Intervoice Ltd. has a statutory fund of UAH 300,000 and its founder is just Larysa Sydor. Both of
these companies’ main activity is leasing and using their own or rented real estate.
Ivan Sydor’s son Yaroslav is officially the founder of just two companies. Grand Capital Ltd. has a statutory
fund of UAH 63,000 and small private enterprise Mediks. In both of these companies, Yaroslav Sydor is
the only owner. The former works and trades food products and the latter is in the stage of being terminated.
Sydor family business:
The aggregate statutory fund of the Sydor family companies is almost UAH 3.5 million.
Additional information: a file with information from the Single State Register of all companies that are
mentioned in this investigation can be downloaded here
This publication was prepared with the support of the Danish Association for Investigative Journalists and
project SCOOP in Ukraine.