The courts declared the oligarch’s bank inviolable for executors
While bankers watch with regret as banks close down one after another in the country, Konstantin Zhevago, owner of the Finance and Credit (FiK) bank, received immunity from the Executive Service for his financial institution.
“Finiki” – as Zhevago’s financial industrial group is called – received a court ruling, according to which the Executive Service, the NBU and the banks holding correspondent accounts “Finance and Credit” are prohibited from seizing or forcibly writing off funds in these accounts. Then the “dates” secured this ban with an appeal, and currently, according to Forbes, they are undergoing cassation.
Meanwhile, the court ruling itself is presented to those Ukrainians who have won lawsuits against the bank and are trying to get their deposits back.
Konstantin Zhevago
A native of the village of Iultin, Magadan Region, Konstantin Zhevago is one of the richest residents of Ukraine. He ranks 9th in the Forbes 2015 list, thanks to his fortune of $735 million. In addition to the bank, the businessman’s group includes a number of large enterprises.
For example, the Kremenchug Automobile Plant (KrAZ), which receives military orders from the state of Ukraine and increased its profit by 30% last year. Or the metallurgical enterprise Ferrexpo, whose main asset is the Poltava Mining and Processing Plant.
The company is listed on the London Stock Exchange and just last week announced the sale of its Brazilian business. For a 15.51% stake in the Brazilian Ferrous Resources, Zhevago received $41.8 million.
In addition to the mentioned assets, Zhevago’s business empire includes, for example, the Mukachevo Tochpribor plant, the pharmaceutical corporation Arterium, etc. One of the foundations of the Zhevago financial and industrial group is its bank, owned by a group of the largest.
Bank Finance and Credit, as Forbes already wrote, together with the domestic banking system is going through hard times – and perhaps the worst times in its entire history. Last fall, the institution approached the regulator with a request to receive refinancing. However, in October-November 2014, the NBU refused to provide funds to Zhevago Bank. At that time, the refinancing resource was sent to Delta and Nadra banks. The NBU also believed that Zhevago was able to recapitalize his bank on his own.
From December 2014 to January 2015, the bank began to have problems with liquidity. Clients could not withdraw their deposits. Enterprises could not transfer wages to employee cards, even if the cards were issued by FiK.
As Forbes previously wrote, Gontareva’s department refused money to Zhevago Bank until mid-February. It was believed that the bank was of interest to someone from the point of view of the possibility of gaining control over one of the businesses of Konstantin Zhevago himself. Among other things, they talked about interest in the AvtoKrAZ plant, an enterprise that worked for the defense industry.
On February 16, 2015, the bank finally received refinancing – 700 million hryvnia. As a source close to the NBU noted in a conversation with Forbes then: “this money could have saved the bank in November 2014.” Another refinance line – in the amount of 276 million hryvnia – was issued to the institution in March.
Already last Friday, the bank received new “lift” – 750 million hryvnia stabilization loan from the NBU. By this time, the bank’s deposit portfolio had decreased to 16.5 billion hryvnia, compared to 18.5 billion hryvnia at the beginning of the year. By June, according to Forbes, the bank’s depositors had won more than 400 lawsuits: court decisions ordered the return of deposits to their owners.
Courts of Belotserkovskaya CHPP
However, the executive service of some of the investors who already have positive court decisions in their hands refuses to execute them – that is, to return money from the F&K accounts. The fact is that on April 28, the ruling of the Kyiv District Administrative Court in case No. 810/1455/15 came into force. In this case, the claim of PrJSC Belotserkovskaya CHPP against the State Executive
Since banking regulation is carried out exclusively by the NBU, any judicial regulation in the banking sector is more an optical illusion than a legal situationGennady Korban, ex-deputy head of the Dnipropetrovsk Regional State Administration
service of Ukraine. The third party to the case is the Finance and Credit Bank.
In its lawsuit, Belotserkovskaya CHPP – let us remind you right away that this facility belongs to Konstantin Zhevago – demands that the actions of seizing and executing the seizure of funds from the Finance and Credit Bank be recognized as illegal.
Involved as a third party, FiK Bank filed a petition in this case:
– prohibit the Executive Service and any bodies – its legal transferees, the National Bank of Ukraine and its territorial departments, as well as Ukreximbank, Pravex-Bank, Uksotsbank and Citibank – from carrying out any actions to impose/execute seizure of F&C accounts, and also prohibit any debiting of funds from the accounts of “dates”.
Judge A. Balaklitsky granted this petition, issuing a corresponding court ruling.
Lawyers interviewed by Forbes believe that this definition is unprecedented. This is how Rostislav Kravets, a partner at the law firm Kravets and Partners, characterizes the definition: “This judicial definition is complete legal nihilism. It shows how defenseless depositors and borrowers are in front of banks. Because there are hundreds and thousands of court decisions according to which the bank is obliged to return money to depositors. These decisions must be implemented. And such a definition, which prohibits the execution of court decisions, violates the fundamental rights and protections of citizens, including the Convention for the Protection of Human Rights. We have a number of clients, depositors of this bank, and starting Monday we will join the cassation process.”
According to him, even when considering the case at first instance, the National Bank was obliged to stop the process. “I believe that both this judge and Zhevago should sit in the same dock. There must also be people from the NBU who led to this situation and turned a blind eye to it. This is the clearest example of how a bank that does not comply with NBU standards and its obligations is not subject to regulator sanctions. The regulator itself contributes to what is happening in order to steal as much money as possible,” Kravets emphasizes, adding: “The National Bank could not have been unaware of what was happening.”
According to bankers, it is the National Bank of Ukraine that should stop the legal conflict. Now, while the case is being processed by a higher authority, the NBU is obliged to intervene in the process. “The National Bank of Ukraine should challenge the cassation. The NBU should join the case as another party. Since banking regulation is carried out exclusively by the NBU, any judicial regulation in the banking sector is more an optical illusion than a legal situation,” notes ex-deputy head of the Dnipropetrovsk Regional State Administration Gennady Korban.
Bankers are confident that Zhevago is trying with all his might to save the bank – however, at the moment this rescue is being implemented at the expense of depositors. For example, Forbes sources claim that when negotiating with some clients, the bank offers a discount of up to 50% of the deposit amount – provided that the remaining funds remain in the institution.
Time to pay
June 30 is the deadline for additional capitalization of banks that assumed such obligations based on the results of IMF stress tests. Those who fail to cope with the task will be handed over to the temporary administration and
They are trying to keep the bank afloat using legal tricks. Based on the structure of liabilities and balance sheet, the bank is subject to withdrawal from the market. Vasily Gorbal, ex-member of the NBU council
Deposit Guarantee Fund. Zhevago Bank has already announced its readiness to increase its authorized capital by 1.97 billion hryvnia. However, similar promises have already been made by Dmitry Firtash, a shareholder of Nadra Bank, and Nikolai Lagun, a shareholder of Delta Bank. Both institutions have now been withdrawn from the market.
Former member of the NBU council Vasily Gorbal believes that through judicial rulings, shareholders “are trying to keep the bank afloat using legal tricks; If we look at the structure of liabilities and balance sheet, the bank is subject to withdrawal from the market.”
Gorbal recalls that during the crisis of 2008-2009, this bank was subject to recapitalization, like other problematic institutions. Then the Finance and Credit bank ended up in the so-called “seven bankers” – a meeting of financiers who, in the fall of 2008, promised depositors that they would save their banks. Among them are the liquidated Ukrprombank, the nationalized Rodovid, Kiev, and Ukrgasbank.
“Since that time, the essence of the bank’s business has not changed. Of course, the shareholder does everything to save the bank from being withdrawn from the market during a crisis period, explains Vasily Gorbal. – We can only applaud our
“Prohibit the Executive Service and any bodies – its legal transferees, the National Bank of Ukraine and its territorial departments, as well as Ukreximbank, Pravex-Bank, Uksotsbank and Citibank – from carrying out any actions to impose/execute arrest from F&C accounts, as well as prohibit any debiting of funds from Finance and Credit accounts.
courts and lawyers. The Irpinsky court blocked the merger of the banks “Kyiv” and “Ukrgaz”. It turns out that the decision of some court neutralizes the resolution of the Cabinet of Ministers.”
Including this court ruling, “dates” have secured themselves against the consequences of the VA: with the introduction of a temporary administration, having secured this court ruling, “FiK” will be able to challenge the actions of the administrator. Also, such a definition reduces the powers of the NBU curator, who has been working at the bank since February.
Another version of the judicial “innovations” of “dates” is an attempt to protect property from encroachment. After all, it was precisely these encroachments that explained the situation when the NBU delayed the provision of refinancing to FiK for months – and when the bank stopped fulfilling its obligations, this refinancing was found.
In turn, Konstantin Zhevago refrained from commenting. Forbes is following the events and is ready to give Mr. Zhevago the opportunity to explain his position on this case.
Bank “Finance and Credit” is one of the last banks with private Ukrainian capital in the group of largest. In addition to him, in the first group of giant banks there remained two institutions of Ukrainian non-state ownership – FUIB of Rinat Akhmetov and Privat of Igor Kolomoisky and Gennady Bogolyubov.
Forbes