Yakov Smoliy. Ex-head of the NBU, millionaire and “powerful old man.” PART 1

The acting chairman of the National Bank, Yakov Smoliy, looks like a simple Ukrainian, like hundreds of them on public transport. It is easy to confuse him with a university teacher or scientist. However, Smoliy is the first official rentier millionaire in Ukraine who received millions from the sale of a minority stake in Aval Bank. His income for 2016 amounted to 18.6 million hryvnia, and he has $4 million in his bank account.

For a long time, Yakov Smoliy was in the shadow of the head of the regulator Valeria Gontarevabeing her first deputy. But almost three months ago, the “dissatisfied” official, before going on vacation, handed over the honorary helm of the NBU to her colleague.

Skelet.Info talks about in whose hands the money of all of Ukraine is now.

Yakov Smoliy. From applied mathematician to IT specialist

Yakov Vasilievich Smoliy comes from the “fay” region of Ukraine – the Ternopil region. He was born on February 1, 1961 in the small village of Verbovets.

In 1978, Smoliy entered Lviv State University. I. Franko for the specialty “applied mathematics”. A year later, he got a job as a laboratory assistant in the research sector at the university. In 1983 he received a diploma with a qualification in mathematics.

After graduating from university, the applied mathematician returns to his hometown and gets a job at the Ternopil Financial and Economic Institute (now Ternopil National Economic University). He worked at the institute for 4 years as a mathematics teacher and even during this time received the degree of junior researcher.

In 1987, he quit his unprofitable teaching profession and went to the Orion radio plant, where he received the position of software engineer. Within a couple of years he becomes the head of the plant’s bureau.

In the early 90s, Yakov Smoliy entered the civil service in the Ternopil regional department of the National Bank of Ukraine. He is invited to fill the vacancy of the head of the computer department, essentially an IT specialist who monitors the software. In 3 years he rose to the rank of deputy head of the regional NBU.

The epic with commercial banks

In 1994, Yakov Smoliy came to work at the Joint-Stock Postal Pension Bank “Aval”, joining the team of former Komsomol functionaries Fedor Shpiga (Honorary President of Aval) and Alexander Derkach (Chairman of the Board). Then the fame of the bank thundered from everywhere – large salaries, bonuses, financial assistance, trips to resorts.

Of course, it was much more logical to work for a private owner than to vegetate in government jobs. Yakov Vasilyevich did not miss the opportunity and got a job at a financial institution to establish communications between departments and manage process automation. But there is one “but”. Aval was a kind of scam – a couple of chairs and a few computers. The employees of the financial institution threw all their efforts into working in the “fields,” attracting clients and concluding contracts. They were paid well for this. This tactic allowed us to assemble high-quality management. Moreover, Aval enlisted the support of Ukrposhta and the Pension Fund, which instantly opened up access to two powerful

sources of financial resources. Billions of hryvnia began to pass through the bank’s accounts, lending with which in the 90s it was possible to receive fabulous income by today’s standards – loan rates often exceeded 50-60% per annum.

After a few months of working at Aval, Smoliy earned his first big money – he was included in the register of shareholders. What caused this unexpected increase? Skelet.Info not known. However, later Smoliy, describing the work of the bank, will say that “you can’t steal from yourself.” Moreover, soon the newly created shareholder became the deputy head of the bank.

In the wake of the financial crisis, Shpig and Derkach pulled Aval into leadership. Let us note that the bank did not have educated financiers or managers, but this allowed it to reach the best of the best level in the country’s market by the end of the 1990s. Yakov Vasilyevich’s income also grew exponentially. By the end of 2003, he owned 2.96% of the bank’s shares, and by the end of 2004 – 1.25%, as the authorized capital increased from 500 million to 800 million hryvnia.

In 2005, Fedor Shpig and his partner Alexander Derkach sold Bank Aval to the Austrian group Raiffeisen International. The transaction amount amounted to a record at that time of $1.028 billion – approximately 3.7 times the capital of the financial institution. Of course, Yakov Smoliy also sold his part of the shares. After the operation, he left the bank.

The sale of Aval’s securities to foreign investors made his shareholders, including Yakov Vasilyevich, legal dollar millionaires. According to the most conservative estimates, if a shareholder owned a stake of 1.25% of the shares (in fact, the exact percentage of shares was not disclosed), then he could well receive $13.7 million from the sale.

Less than six months later, the former shareholders of Bank Aval registered a new financial institution, Prestige. Yakov Vasilievich became one of the ten founders of the bank. Its share in the authorized capital of 300 million hryvnia amounted to 7.28%. He also headed the Supervisory Board of the financial institution.

Prestige, as conceived by its founders, was supposed to serve large private clients, or rather deal with their assets. Back then it was considered a completely new direction. In a short period of existence, Prestige entered the top 20 leading banks, which was presented by the Association of Ukrainian Banks in May 2006. Having built up a customer base, Shpig and Derkach, as the main holders of securities, decide to sell their brainchild. Buyers were found immediately – the Austrian banking group Erste. Initially, an agreement was signed to purchase a 50.5% stake in Prestige for $35.3 million, but a few months later, the Austrians bought the rest of the shares for $104 million. Smoliy again sold the papers he owned and received a large sum for them. As for the post of head of the bank’s supervisory board, he left before the operation began.

The banking market immediately assumed that Austrian representatives instructed Shpi and Derkach to create this bank in order to save money. Most likely, the Prestige scheme was developed during the negotiations on the sale of Aval. Thus, the Austrians acquired not a business, but a license. This means that the payment looked a little different: capital plus a bonus for the work done – more than $60 million.

After the sale of Prestige, Erste representatives demanded that the businessmen sign a document, according to which they pledged not to create banks for three years.

Milk rivers and insurance banks

The ban on “stamping” financial institutions did not frighten entrepreneurs. They started a dairy business, in which they invested all the money they received from the sale of banks. Let us note that the co-owners of the banks “Aval” and “Prestige” had previously provided loans to milk processing plants and agricultural enterprises. So they bought:

• one of the largest enterprises is the Yagotinsky Creamery;
• Zolotonosha Butter Factory;
• Gorodenkovsky cheese factory;
• CJSC “Bashtansky cheese plant”;
• Piryatinsky cheese factory;
• Varvabutter-cheese factory;

To ensure the operation of the enterprises, businessmen created the Milk Alliance holding in 2006 (Shpig had 25% of the shares in it, and Derkach had 15%), which united all the enterprises.

As for Yakov Vasilyevich, he not only received a share in the dairy holding, but also became a director in Prestige Group CJSC, the second holding company that was created to control the entire business of Shpig and Derkach.

All areas of entrepreneurial activity were placed under the leadership of the Prestige Group: dairy plants in the Milk Alliance, three insurance companies – IC Etalon (established in 1993, authorized capital – 180 million hryvnia), Etalon Policy (organized in 2001, authorized capital – 118 million hryvnia), life company “Etalon Life” (established in 2003, authorized capital – 120 million hryvnia). Soon IC Pusk and IC Astra were included in the holding, and Yakov Smoliy joined their supervisory boards.

Fyodor Shpig and Alexander Derkach began to skillfully juggle with insurance companies, selling them to foreigners at exorbitant prices. They received millions, allowing all shareholders to enrich themselves. In 2006, they sold IC Etalon Life for 7.6 million euros to the Dutch group Fortis. Yakov Smoliy owned 8% of the shares of the life company; he also retained a seat on the supervisory board, and after 3 years he headed it. It was only in 2013 that he resigned from his post after resale of the insurance company. We also parted ways with three more insurance companies – Pusk, Astra and Etalon-Polis. The securities of these companies were purchased by other shareholders and their representatives on the supervisory boards. Such a large-scale sale operation gave rise to rumors that Shpig and Derkach were leaving the insurance market. But they denied the information, saying that all of these insurance companies were technical companies.

Businessmen placed their bets on IC Etalon, which brought excellent profits. It was given to Smoliy’s family – Yakov Vasilyevich and his wife. Let us note that “Etalon” worked with a bang. For example, in 2013 alone, the insurance company paid 35 million hryvnia in premiums. Despite this, “Etalon” suffered the same fate as its “brothers”. In 2013, the insurance company was sold to Russian Gennady Duvanov, an insurance luminary – the ex-president and founder of the ASKO insurance company. Yakov Vasilyevich sold 41% of the insurance company’s shares to a Russian investor, and his wife, Svetlana, sold 25%. However, Duvanov did not have enough money to develop the business and, according to unconfirmed reports, Skelet.Inforeturned the insurance to the former owners. And they sold it again to another oligarch.

In parallel with the insurance branch, Yakov Smoliy developed the dairy business. In 2010, he became a member of the supervisory board of CJSC Milk Alliance. With his input, a major deal was concluded to acquire Novoarkhangelsk Cheese Plant OJSC, where he also, according to the usual pattern, joined the supervisory board. Yakov Vasilyevich left this post on March 14, 2014 of his own free will.

Smoliy also appeared in AKPO Torgrichtrans (engaged in wholesale trade and rental), where he owned 16.4% of the shares.

Arina Dmitrieva, for Skelet.Info

CONTINUATION: Yakov Smoliy. The new helmsman of the NBU, a millionaire and a “powerful old man.” PART 2

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