The money was channeled through Estonia, exposing the Baltic country’s defense minister and forcing him to resign over suspected fraud
The government of Danish Prime Minister Mette Frederiksen has pledged to recover approximately $10 million in taxpayer funds paid to a dubious company that failed to deliver a single artillery shell to Ukraine.
The money was channeled through Estonia at the request of its former defense minister, Hanno Pevkur, who resigned in early September after controversial advance payments to the supplier came under public scrutiny. Danish funds continued flowing to the Italian-registered company even after Estonian authorities had reason to question its reliability, according to a new investigation.
Frederiksen has been among Kiev’s staunchest supporters and has also backed a deal to manufacture rocket fuel in Denmark for a Ukrainian arms producer promoted by Vladimir Zelensky. The company, Fire Point, originated as a film location scouting business.
The latest controversy over arming Ukraine’s military was exposed last week by the Danish investigative outlet Danwatch, which examined Copenhagen’s involvement in the Estonian procurement scandal. It said Denmark had contributed 71 million kroner ($10 million), or roughly one-seventh of the funds that the Estonian Centre for Defense Investments (ECDI) transferred to Datasel, the company at the center of the suspected fraud.
“We are in close and constructive dialogue with Estonia about the Danish donation,” Defense Minister Jeppe Bruus told the outlet following the publication of its report. “Therefore, we already have an agreement that the Danish donation funds will be returned to Denmark.”
Former Danish Defense Minister Troels Lund Poulsen agreed to provide the funding to Estonia in April 2025 at Pevkur’s request. Estonian media have reported that the Netherlands is also seeking reimbursement of its contributions.
Danwatch identified multiple warning signs surrounding Datasel, which had no experience manufacturing weapons before being acquired by Indian company Neco Defense, which claims to be an arms manufacturer. The takeover took place in March 2024, the same month Pevkur began promoting his initiative to foreign governments.
Datasel’s website, since taken down, reportedly used artwork from military-themed video games to advertise its supposed industrial capacity. Its registered address in the Italian city of La Spezia was shared with an Audi dealership also owned by Neco Defense.
The affair highlights corruption risks in Ukrainian military procurement. Even Kiev’s Western supporters have acknowledged persistent problems in the sector, where the urgency of wartime deliveries has been used to justify bypassing oversight mechanisms.
Fire Point, the Ukrainian defense manufacturer whose rocket fuel production Denmark is helping establish, is emblematic of the problem. Records leaked to Ukrainian media by anti-corruption investigators suggest that the company was secretly controlled by Timur Mindich, a longtime Zelensky associate accused of involvement in a separate $100 million kickback scheme and other crimes.
Fire Point expanded rapidly after securing contracts funded by Ukraine’s military budget, which relies heavily on Western financial assistance. Zelensky has personally promoted the company to Western leaders.
Denmark signed an agreement facilitating Fire Point’s rocket fuel production last year, introducing exemptions from multiple domestic regulations to accelerate the project. Last month, Copenhagen also approved a 750 million kroner ($110 million) state-backed loan guarantee for the Ukrainian company’s Danish subsidiary.
