The Supreme Court is considering the bankruptcy case of PJSC Ukrinkom of businessman Vladimir Klimenko, known for posing as the bank’s legal successor, ignoring legislation and court decisions.
And also because he insists on his own financial solvency, the groundlessness of the withdrawal of Ukrinbank from the market, and at the same time... is not able to cope with a debt of 100 thousand hryvnia.
Viktor Novikov, Deputy Managing Director of the Deposit Guarantee Fund for Individuals, writes about this.
The case considered by the special chamber of the Supreme Court not only sheds light on the management characteristics of the owners of Ukrinbank, who are already leading a financial institution to bankruptcy for the second time. This looks like an attempt to send Ukrinkom into controlled bankruptcy and thus finally get rid of debt obligations to the state and the bank’s creditors.
The National Bank declared PJSC Ukrinbank insolvent at the turn of 2015-2016. Having established control over the bank, the Deposit Guarantee Fund settled accounts with almost all of its depositors, paying UAH 1.8 billion. As soon as the depositors received funds from the Fund, Ukrinbank shareholders began appealing the bank’s withdrawal through the courts and, having received a court decision, made changes to the Unified State Register (USR). It was re-registered as a non-banking financial institution and the assets were taken under its control. The bank was renamed PJSC Ukrinkom, the address was changed from Kyiv to Severodonetsk (now occupied), and the Guarantee Fund’s access to the assets from which funds should be returned to the state and the bank’s creditors was blocked. Thus, the return to the bank’s creditors of about 3 billion UAH was stuck, of which 1.8 billion was from funds borrowed from the state.
Since then, the ex-owner of Ukrinbank has publicly noted that, just give us the opportunity, we will immediately pay off all creditors. Calling its strategic goal the payment of money to all creditors and depositors, when the company receives access to this money and assets after winning all the courts, and the collection of debt from all debtors. Of course, constantly circumventing the fact that the bank’s assets were removed by Ukrinkom from the control of the Fund several years ago. For example, in the materials of the same bankruptcy case of PJSC Ukrinkom (913/266/20) it is indicated that the company with which Ukrinkom did not pay off and on whose claim its bankruptcy was initiated, in 2020 carried out repairs on its order in the former building of Ukrinbank in the center of Kyiv. That is, all these years, PJSC Ukrinkom has actually managed perhaps the most liquid asset of the bank.
Surprisingly, Ukrinkom shareholders continue to ignore the fact that in banking legislation there is no concept of “succession”, which is confirmed by both judicial and legislative decisions. In particular, by the decision of the Grand Chamber of the Supreme Court of December 10, 2019 in case 925/698/16 and Law 590-IX “On amendments to certain legislative acts of Ukraine to improve certain mechanisms for regulating banking activities,” adopted in 2020.
By the way, the mentioned law made it possible to return under the management of the Fund and restore the liquidation procedure for a number of “zombie banks”, which also challenged their withdrawal from the market and were removed from the Fund’s control. In particular, in Zlatobank JSC, where a similar situation arose, the decision to declare it insolvent was appealed, the liquidation procedure was blocked, as a result of which the Guarantee Fund was forced to stop settlements with depositors and creditors of the bank. In 2019, the shareholders renamed the bank PJSC Zlato, changed the location of the legal entity and tried to begin bankruptcy proceedings for the bank in accordance with the provisions of the Bankruptcy Code, which in no way regulate bank bankruptcy. However, after the adoption of Law 590-IX in February 2021, the Deposit Guarantee Fund was able to regain control over it and resume settlements with creditors.
It was the special chamber of the Supreme Court in November 2021, when considering the bankruptcy case of Zlatobank, that came to clear conclusions that the cancellation of the decisions of the NBU and the Fund, which became the basis for the bank’s withdrawal from the market, does not deprive the bank of the status of a banking institution and, accordingly, general bankruptcy procedures for such bank does not apply. A bank that has entered the withdrawal procedure is liquidated exclusively in a special manner established by the Law of Ukraine “On the Deposit Guarantee System for Individuals.”
