On 17 June 2020, the Supreme Court handed down a definitive judgement conclusively finding unlawful the decisions by the National Bank of Ukraine that led to withdrawal of the bank Financial Initiative from the market. The Court found the NBU’s actions improper and repealed the resolution of the Management Board of the NBU. We have been fighting for justice for 5 years. And this judgement dots all the i’s and crosses all the t’s over this matter.
Over the past 5 years, we have been facing unprecedented administrative pressure on the part of the NBU - on our company, its management and me personally as its owner. We have survived an avalanche of manipulations, fake accusations and mudslinging. The judgement proved I was right when I said on the very next day after the NBU took the decision to withdraw the bank from the market: It was an absolutely stable bank, it was capable of continuing to operate successfully, both in its deposit and loan business.
I believe that the decision by the previous leadership of the NBU that approved such an unlawful decision was a crime. It was an act of cynicism to resort to discounting the treasury bills that the bank had on its books. Just to remind you, the NBU’s principal argument for declaring Financial Initiative Bank insolvent was an allegation that the bank had defaulted on an NBU refinancing an loan of UAH 1,977.8 m accounting for 13.1% of the bank’s liabilities, against which the bank had pledged domestic treasury bills as collateral. The Court found that by the time the bank was declared insolvent those liabilities had been extinguished when the NBU had called that collateral at a gross undervalue. Back in 2017, the courts found that the treasuries had been attached unlawfully and ordered the National Bank of Ukraine to pay damages of UAH 618,450 m caused by the NBU’s actions. In 2018, the NBU admitted to wrongdoing and signed settlements with the Deposit Guarantee Fund (which was acting at that time as the bank’s administrator) and compensated UAH 618,450 m.
It is obvious that what became known as the ‘purge’ was in fact an economically short-sighted amputation performed on the banking sector, which eroded from a vital tool for crediting the economy into an instrument for speculative trading. Time will tell what to make of those events. One thing is certain: a constructive dialogue is always better than war. These past 5 years of war waged against us have taken a heavy tall on companies employing tens of thousands of people. We have been fighting for 5 years to prove we’re right, a fact evident to the entire market and that the bank was viable. The bank’s assets as of the time of the decision to put it in provisional administration totalled UAH 15.3 b. Financial Initiative was one of the top 20 banks in Ukraine. It would not have run into any problems either with deposits (the bank’s deposit portfolio totalled UAH 3.5 b) or servicing refinancing loans. Those actions on the part of NBU officials were deliberately unlawful; they acted under the guise of purging the banking sector while not doing it in earnest.
Restoring justice was for me a question of principles. Sadly, the bank was destroyed during those 5 years. Throughout those 5 years the NBU and the ‘activists’ close to it took the liberty of throwing false and manipulative accusations at us. The truth prevails but at what price? Who benefitted from this unfair and stupid war from the standpoint of the public interest? This is a judgement call. We rest our case by acknowledging the facts as found by the Supreme Court:
- the bank was withdrawn from the market unlawfully;
- the bank’s management was acting in compliance with the law;
- the shareholders of the bank were acting in accordance with the laws of Ukraine and did not violate any of them;
- the bank was forced into bankruptcy through the NBU’s improper actions;
- the NBU’s unlawful actions inflicted a huge economic loss.
Restoring justice was important for me personally. It is important for the public. I believe it is fair to seek punishment against those responsible for those unlawful actions committed against the bank. We shall not rest and act in strict adherence to the law to prevent such injustice from ever happening again.