Ukraine’s SBU security service has arrested five people who allegedly tried to steal nearly $40m (£31m) that was supposed to be used to buy shells for the country’s military in its war against Russia.

The SBU said on Saturday it had arrested two senior officials from the ministry of defence. They had allegedly conspired with the chief executive of a little-known arms firm, Lviv Arsenal, over a contract for 100,000 mortar shells. Another employee and an alleged accomplice were also detained.

The ministry paid the amount in full in August of last year. The firm failed to deliver any shells and instead diverted some of the cash to a bank account in the Balkans, it was claimed. The SBU said it had charged five people. One was arrested as he tried to flee the country. All face up to 12 years in prison.