As Concorde Capital informs, in recent weeks, NABU declared Bakhmatyuk, former National Bank Deputy Governor Alexander Pisaruk, as well as eight other VAB Bank and NBU officials to be suspects in a criminal case involving an alleged conspiracy aimed at expropriating a UAH 1.2 bln loan from the central bank writes

NABU alleges Pisaruk, during his NBU tenure, illegally provided the stabilization loan to VAB Bank (whose major shareholder was Bakhmatyuk) in October 2014. Forty days after the bank received the loan, the NBU declared the institution to be insolvent.

The loan’s alleged illegality is based on two key NABU arguments:

1. The bank provided an incomplete set of documents while applying for the loan – so the NBU should have refused it.

In particular, NABU alleges the bank provided no financial recovery plan, which should have been an integral part of the documentation for a stabilization loan.

2. Among the loan application documents, the bank provided a falsified evaluation report of collateral in which its value was overestimated by multiple times, and NBU officials were allegedly aware of that fact. In addition to that, the NABU alleges that: there was a conspiracy between VAB and NBU officials since they were meeting before the loan was provided and the provided loan was used for the benefit of related parties of the bank (companies and individuals).

Experts of Concorde Capital consider that NABU’s allegations of conspiracy do not look well-grounded, and most likely will be rejected in an impartial court of law.

Because Bakhmatyuk and the NBU are arguing that VAB Bank did indeed provide a complete package of documents. Conclusion that the recovery plan did exist, is based on the following: VAB Bank was declared a “problem bank” in early October. By law, such a bank must provide a financial recovery plan within seven days, and there is no information that that wasn’t done.

In its Nov. 21 press release declaring VAB Bank to be insolvent, the NBU mentioned that the bank had provided a financial recovery plan.

Except this Bakhmatyuk and the NBU are also claiming the collateral evaluation report was prepared in line with legislation. We believe there could have been an overestimate of collateral value in the report. However, given the bank’s urgent need in liquidity, the NBU might have decided to give the benefit of the doubt to the bank by overlooking possible discrepancies in the report (otherwise, the NBU would have had to refuse the loan until another report was prepared, which could have resulted in a quick bank’s collapse).

Both Bakhmatyuk and the NBU claimed that VAB Bank spent the entire amount of the UAH 1.2 bln loan to repay individual deposits.

Analysts of Concorde Capital believes that NABU pressure could have catastrophic consequences for the business of Oleg Bakhmatyuk, and the state will recover more money by agreeing with Bakhmatyuk on the VAB Bank case.

It should be noted that Oleg Bakhmatyuk’s Ukrlandfarming group of companies pays billions in taxes and employs 27,000 people. Because of NABU’s actions, these people may lose their jobs.

On November 11, mass media reported that NABU employees arrived at the office of one of the largest banks of Ukraine – Raiffeisen Bank to detain the chairman of the board of Alexander Pysaruk, the former first deputy chairman of NBU Valery Gontareva, who now lives in London.

On November 12 Bakhmatyuk appealed to President of Ukraine Volodymyr Zelensky regarding NABU and GPU, which have resumed criminal proceedings against VAB Bank.

He explained that NABU’s suspicion was politically motivated and jeopardized the work of Ukrlandpharming Agro Holding, and also dismissed claims by the National Bank of UAH 29.3 billion of debt owed to the state.

Former Minister of Finance Oleksandr Shlapak reported that Bakhmatyuk had fought for VAB Bank to the last and tried to pay $ 200 million for saving the bank.

It is also known that Business-Warta and Ukrainian Agrarian Club associations have appealed to President Zelensky to defend Bakhmatyuk’s Ukrlandforming.

On November 15, the Supreme Anti-Corruption Court ordered the former first deputy of the National Bank, Alexander Pysaruk, to serve a security measure of 5 million hryvnias.

On November 18 it was reported that the examination refutes NABU’s charges.

Raiffeisen Bank pledged Pysaruk. He saved his position in office.

Reference: NABU has opened a case about allegedly inappropriate use of a stabilization loan granted by the National Bank to VAB Bank of Oleg Bakhmatyuk. However, the National Bank has already denied these allegations, proving that the entire amount of refinancing, UAH 1.2 billion, has gone to the depositors.