The main working version is “Someone fucked up.” Vyriy founder Oleksiy Babenko told why the company was searched and how he was almost killed by an Iskander

Another high-profile scandal has erupted in the Ukrainian defense-industrial complex (DIC). The State Bureau of Investigation (SBI) has conducted a large-scale wave of searches at Vyriy, one of the key manufacturers of drones for the Defense Forces.

The company’s founder, Oleksiy Babenko, convened an emergency press conference to discuss the events of that day in detail, answer all the pressing questions of journalists, and provide figures that prove the absurdity of the law enforcement officers' claims.

«Up to 70 searches per day»: what and how it happened

According to Babenko, the day turned out to be extremely difficult, so he prepared blanks for the speech so as not to miss a single detail. The scale of the investigative actions turned out to be unprecedented. The searches were carried out in the office of the Vyriy company, at the home of Oleksiy himself, at the home of his mother and other relatives.

«In total, we counted more than 40 searches. Some sources say the number is up to 70. Perhaps we are breaking some records here, but, unfortunately, that’s how it is. We even stopped by villages that I didn’t know existed — places where our suppliers collect components for us. They called me in a panic and asked what was happening, because we were working normally,» says the founder of Vyriy.

Babenko emphasized two important procedural points:

1. Status: Oleksiy Babenko and the company are in the status of witnesses, not defendants.
2. Lack of sanctions: Law enforcement officers visited over 40 (or up to 70) locations across Ukraine as part of so-called «urgent investigative actions.»

The next step for law enforcement officers, according to Oleksiy, should be to attempt to legalize these searches (i.e., the seized property) through the court retroactively. «Today I learned that such a procedure is considered normal: first you conduct a search, and then you file a petition with the court asking, ‘Let me conduct a search yesterday.’ It sounds funny,» the entrepreneur ironically says.

What does the SBI accuse Vyriy of? Presentation of figures

The official claim that the investigator voiced to Oleksiy is «unfounded inclusion of inflated production, administrative, and other costs in the cost price.» The investigation believes that the company buys components from individual entrepreneurs at inflated prices, inflating the cost price in order to withdraw money.

Babenko calls this claim «absurd to the extreme» and showed a presentation of Vyriy’s financial and product metrics (which was originally prepared not for the press, but for partners). It proves that low prices are the company’s main ultimatum, and the people who prepared the attack «didn’t even manage to Google why we sell drones.»

Vyriy product portfolio and pricing:

• FPV drones: Last year, they were 25–30% cheaper than the average drone on the market (in some categories, 26% cheaper than the lowest price of competitors). Vyriy regularly won the cheapest tenders. The balance of price, high quality and support is the basis of the company’s development.
• Interceptor drones: They have the lowest price on the market. One of the suppliers has the same price, plus or minus, but if you take all the other competitors, Vyriy is cheaper. It’s very simple math.
• The Sokil drone: Babenko calls it «the quintessence of low price.» Over the past month and the month before, Vyriy sold more Sokols than all other Ukrainian manufacturers combined over the same months. The reason is that it costs $5,000. The military compares it to foreign equipment costing $40,000–$50,000. Here, the price difference is not 20%, but 10 times.
• Blyskavka drone: The cheapest drone in its class, which is easy to verify. Babenko suggests that it costs less than the Russian counterpart, the Lancet («rook»).
• New products: Drones «Slavik» and «Veresen» (not yet mass-produced, 0 sales), as well as the «Dzhankoy» NRC (0 sales), so there could be no physical abuse of them.

Financial indicators:

How does pricing work in the defense industry? A fixed profit of 25% is added to the production cost — this is how the price for the state is formed. Accordingly, in order to inflate profits, it is necessary to artificially increase the cost. But Vyriy does not do this.

Last year, the average price of a 10-inch Vyriy drone was significantly lower than the average price of competitors' analogues. The company’s profitability last year was recorded at 18,7%.

In the first six months of this year, Vyriy earned significantly more than in the entire previous year. Last year, it had UAH 11.2 billion in revenue and UAH 2.1 billion in EBITDA.

«Of course, the size of the company within Ukraine shakes and confuses some people. Some people think: 'Why am I not here?' or 'Why are our people not here?' or 'How did we miss such a business?' Hence the accusations,» Babenko comments.

Scale: every 4th FPV drone on the frontline is from Vyriy

To demonstrate the company’s importance to the country’s security, the founder provided several operating figures:

• Market share: Every fourth FPV drone in the country is a Vyriy drone (25% of the market). The company ships thousands of units every day (not hundreds, but thousands).
• Military clients: The company works directly with 212 military units. In total, about 300 units actively use drones in combat operations. That is, Vyriy provides almost everyone. In May, the company took 3rd place in the number of confirmed enemy hits (48.5 thousand targets hit).
• International recognition: 70,000 Vyriy drones were purchased and delivered to the Armed Forces of Ukraine with funds from European partner countries. Before concluding contracts, the Ministries of Defense of European countries conducted strict compliance checks on the company’s legality and ownership structure.

Working with sole proprietors and debunking the myth of «cash on delivery»

Law enforcement officers accuse Vyriy of working under schemes through individual entrepreneurs. Information about a network of 150 individual entrepreneurs was spread on the Internet. Babenko decided to reveal the secret:

«There are much more individual entrepreneurs in our reporting — somewhere around 400–500. And there is a simple reason for this. Over a certain period, we purchased 8.4 million pieces of unique Ukrainian components worth 7.5 billion hryvnias. We have our own components worth 3 billion hryvnias. (The rest are contractors).

How do you imagine the production of antennas for FPV drones in Ukraine? This is a small business. To cover our needs, the turnover of such a manufacturer would be several million hryvnias per year. This does not cover the limit of even one FOP. Therefore, we work with hundreds of small Ukrainian component manufacturers. These figures are so gigantic that it is impossible to beat them illegally.

Babenko also denied information about «schemes of fake contracts for UAVs, where one quantity was allegedly indicated, but a smaller quantity was supplied: «I deny this. I don’t even understand the logic and meaning of such a scheme, where we would earn something here. If we wanted to take money for 100 drones and deliver 50, we wouldn’t need individual entrepreneurs for this.»

Why accusations of «cash-out» through an individual entrepreneur are nonsense in Diya.City:

Babenko explained in detail the tax logic of the Diia.City space, of which Vyriy is a resident, revealing the ignorance of the investigators:

1. If a company in Diya.City withdraws funds through an individual entrepreneur, it pays 9% tax on the withdrawn capital + ~5% tax on the individual entrepreneur himself. In total, this is ~14%.
2. If Oleksiy Babenko wants to legally withdraw the company’s profits to himself (as dividends or to raise his own salary), the tax rate in Diya.City is only 10–11%.

«Objectively, if I need to withdraw 1 million or 40 million hryvnias, I simply legally pay my salary, paying 10% taxes to the state. It’s cheaper than cashing out through individual entrepreneurs at 14%! When IT specialists or manufacturers from Diya.City are charged with cashing out through individual entrepreneurs, people’s heads are simply foggy, they haven’t been able to read the normal documents that our company operates under,» the speaker emphasized.

What was seized during the searches? Cash for salaries

The entrepreneur told what exactly the security forces took away:

• At Alexey’s house: They seized $3,500 (two thousand and three and a half thousand dollars in different places). Alexey remembers it with a smile: «At first, the investigators said they wouldn’t take it, because they hadn’t even saved up three pitiful bundles of money, but then they did.» They also seized personal phones and a notarial agreement from the house on the purchase of 75% of the shares of the Babel publication and shares in another public company.
• In the office: About 40 million hryvnias were seized. Babenko emphasized that the documents for these funds were provided to the investigators immediately — this is official money for employees' salaries. And he immediately apologized to the employees. As if this salary will not be there, because they cannot legally charge the same amount again.

Why does a defense company keep millions in cash for salaries?

This is solely a matter of human safety in wartime.

«Imagine: we are a defense company, all processes are secret. And here we are posting a complete list of all our engineers and developers to some commercial bank, indicating their addresses and salaries. This is completely illogical and dangerous. Therefore, the company legally withdraws money from the bank once and for all, information is compiled, and people receive money. This information is completely open, including for the SBI, but in the releases they decided to „forget“ about it.»

To the employees who were temporarily left without payments due to the withdrawal of cash, Oleksiy promised: «Soryan, we will pay everything as soon as we return the money, or find another way. The war does not stop.»

Security trash: arrival of Iskander and $1 million for evacuation

During the press conference, Oleksiy Babenko announced shocking information that the company had deliberately not announced in recent weeks.

«About three weeks ago, a Russian Iskander missile flew into my private house, right into the fence. We were very lucky: the house is located on a slope, and the missile exploded 20-30 meters below. We didn’t go down to the basement (I don’t advise doing that), it was very deafening. It hit cars, windows, and the building, but we got out without a single scratch. We were also saved by the fact that all the windows and doors were open — they were simply torn off their hinges, and not blown inside in pieces of glass.»

After that, Oleksiy lived for three weeks exclusively in hotels where foreign delegations come (considering them the safest places in the country). They found a new safe house only the day before yesterday, moved in, and today, due to searches by the State Bureau of Investigation and the disclosure of addresses, they are forced to move out again.

Consequences of searches for the company’s logistics:

1. Office evacuation: The company’s main office, which employs hundreds of people across thousands of square meters, is now being urgently relocated due to security risks. Security forces have not visited the production facilities (only suppliers), but suppliers will also be helped to change locations.
2. Relocation cost: Relocating just one large production location costs the company about 40 million hryvnias (~$1 million).
3. The main problem: The move will greatly slow down development. «I personally and most of the company will now be dealing with boxes and logistics instead of creating things that kill Russians. Moving doesn’t kill Russians.» In addition, defense companies have a hard time finding premises: «Everyone around is for victory, but they ask: ‘Please, be for victory not in our office.’»

Oleksiy is sure that the company was monitored for a long time. And if Ukrainian authorities could do this, then Russian special services could have obtained the same information, which is why Vyriy is completely rewriting domestic security policies.

Connection with the publication «Babel» and the «Skelya» division

Today, the media actively discussed the post of Babel co-owner Kateryna Kobernyk, as well as whether the searches at Vyriy were related to Babel’s recent high-profile journalistic investigation into the deaths of mobilized fighters in the Skelya military unit. Since Babenko owns 75% of the publication, the searches were considered revenge by the unit’s military leadership.

Babenko dotted the «i"s in relations with the media:

• Editorial policy: «We agreed with Katya: if she writes a lie or a fake, I sell Babel and take offense at her. If I try to influence the texts, Katya takes offense at me and publicly tells the whole world about it. We do not influence editorial policy at all.» Oleksiy added that Vyriy donates to many media outlets, and joked: «All the media outlets that we did not donate to were offended here — if anything, please contact us.»
• Connection with «Skelya»: Oleksiy assures that the investigation did not affect him. He learned from «Skelya» itself that the material would be published the day before publication. «Today, on the day of the searches, I got a call from „Skelya“ and they said: „We have no complaints against you.“ I don’t think this is their revenge. There were attempts through Telegram-trash boxes to spread the narrative that this is „Olexi’s war with someone“ and to put pressure on the Babel editorial office through me. But let it remain on the conscience of those who draw it. It’s one thing to post in public places, another thing to do 70 searches a day. These are different stories.»

Russian passport photo: what was it?

Journalists asked to comment on a photo of a Russian passport, which security forces actively distributed online during searches in Vyriy.

«This is my girlfriend’s passport (unfortunately, not my wife’s yet, there’s just no time because of work). She was born in Kazakhstan, her relatives were once forcibly evicted from Ukraine. She lived in Russia for only half a year, when she was 14 years old — that’s where she got this passport. Since the age of 16, she has lived in Kyiv continuously, graduated from school here, received a higher education, and with the beginning of the full-scale invasion, she did a huge amount of volunteer work and helped me build Vyriy from scratch. By the way, the security forces themselves have already removed this photo from the publications, because they understood the absurdity of the accusation.»

The epic from the Parkovy Exhibition and Convention Center

The press conference was planned at the Parkovy Exhibition and Convention Center, but the venue canceled the event at the last minute. Conspiracy theories about a «ban from criminal authorities» immediately began to spread online.

Babenko dispelled the myth: «There is no conspiracy theory here. The administration of „Parkovoy“ simply, to put it bluntly, sucked a little. They themselves made the „brilliant“ decision to ban the event with journalists from the defense company after the searches. On the other hand, the bookstore-cafe „Sens“ and its owner Oleksiy were not scared, although they have never been searched. Ukraine is supported by such people.»

Founder’s versions: who did it and why?

Oleksiy frankly told what versions of customers the company considered during the day:

1. The version about «competitors under sanctions»: They were thinking about the entourage of Roman Kravets (the former owner of the Telegram channel «Joker»). According to Oleksiy, it has been confirmed from many sources that one of his associates has a number of businesses producing drones in Ukraine (under sanctions for smuggling). However, the scale of the raid of 70 searches is too large for a person sitting in Austria.
2. The main working version is «Someone screwed up»: Oleksiy spoke with many representatives of the current government and the leadership of the Ministry of Defense (whose reforms he views extremely positively). According to his conclusions, some official or security officer tried to advance his petty interests, «run into» a business, or move someone, but simply overdid it and overdid it.

«When people in power understood the scale, it dawned on them: if something happens to Vyriy (not even through searches, but if the Russians find out the addresses and fly there), Ukraine will lose 25% of all its FPV drones at one point. This is critical for the existence of the state.

«Therefore, I think that we will reconcile with everyone, there is no point in conflicting within the country, because if we do not produce weapons, the Russians will come, and they will interfere with life much more than internal troubles. I am sure that after some time we will all shake hands, sort it out, and everyone who needs to will recognize that we are a normal, legal company. The order of actions of the security forces was a little too unusual, but everything will be resolved,» Oleksiy Babenko summed up.