concordes-tax-audit-is-dragging-on-experts-suspect-fraud-and-fear-of-liability-on-the-part-of-tax-authorities

Concorde's tax audit is dragging on: experts suspect fraud and fear of liability on the part of tax authorities

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Tax audits are an important part of controlling the activities of financial institutions, especially those in the process of liquidation. However, in the case of Concorde Bank, the tax audit is being delayed for an unreasonably long period of time, which has raised concerns among experts and MPs. This situation has become an example of possible abuse and administrative pressure on business by tax authorities, who are probably delaying the audit out of fear of being prosecuted for fraud, UNN writes .

Under Ukrainian law, a tax audit of a bank in liquidation may last as long as the liquidation itself. However, in the case of Concorde Bank, the situation was rather strange.

After the National Bank of Ukraine (NBU) decided on August 1, 2023 to revoke the license of Concord Bank and start the liquidation procedure, a tax audit of the financial institution was conducted. It usually takes several months for the tax authorities to conduct such an audit. "Concord was no exception, as the audit lasted three months. Based on its results, the tax authorities charged the bank a small fine of UAH 700 thousand. However, according to the bank's co-owner, Olena Sosedka, the chairman of the Verkhovna Rada Committee on Finance, Taxation and Customs Policy, Danylo Hetmantsev, intervened in the process and, at his request, the fine was increased to almost UAH 400 million.

We know that based on the results of the first tax audit , an act was drawn up in the amount of 700 thousand hryvnias. However, on Hetmantsev's personal instructions, another 392 million hryvnias were illegally added to this act. This raises the question: why not a billion or even 10 billion? The absurdity of the situation is obvious

- noted Olena Sosiedka.

Concorde's liquidator, appointed by the Deposit Guarantee Fund, disagreed with the audit results and, following his objections, an additional tax audit was ordered. It is still ongoing, which creates the impression of deliberate delay on the part of the tax authorities.

Experts interviewed by UNN do not rule out that the tax authorities are deliberately delaying the audit because they are afraid of being held accountable. After all, it is those who conducted the audit and signed the act based on its results who will have to answer, not those who gave the order to falsify it.

In the case of Concorde, the ongoing tax audit of Concorde Bank negatively affects the process of its liquidation and offsets the achievements of the Deposit Guarantee Fund, which has already paid out funds to the 9th line of Concorde's depositors and creditors and is in the final stages of liquidation.

Falsifying and deliberately delaying the results of an audit is a serious offense for which tax authorities may be held criminally liable.

If forgery of documents has occurred, it may be criminal liability, if it is just a mistake, it is administrative liability. It all depends on the damage caused to the victim. If the tax authorities forged the whole thing (the audit report - ed.), it will definitely be criminal liability, if they miscalculated something, it will be administrative,

- explained in a comment  to UNN  lawyer Oleksandr Baidyk.  

In addition, tax officials may also be subject to disciplinary action. "If the court establishes the fact of unjustified charges, it can recover court costs, legal aid and moral damages from the tax office. Employees themselves may be subject to disciplinary action," Denys Neviadomskyi, president of the retired All-Ukrainian Association of Judges, told UNN  .

To avoid further delays and ensure the transparency of the audit and liquidation of Concorde Bank, the tax authorities should take steps to complete the audit as soon as possible and make its results public.

Recall

Despite the war in Ukraine, the process of removing banks from the market has not stopped. Thus, since February 24, 2022, liquidation was initiated for 8 banks. In 2023, for the first time in Ukraine, not only bankrupt banks but also profitable institutions were subject to liquidation and license revocation, including Concord Bank. As Olena Sosedka stated, at the time the regulator announced the decision to liquidate the bank, the financial institution had enough highly liquid assets to make all the necessary payments in 2-3 weeks. But the process of bank liquidation is strictly regulated by law and can generally take up to three years.

Add

Concorde's shareholders challenged in court the decision of the National Bank of Ukraine to withdraw the bank from the market. The Dnipropetrovs'k District Administrative Court declared unlawful and canceled the decision of the NBU to revoke the license and liquidate Concord Bank. However, Ukrainian legislation is written in such a way that the process of removing a banking institution from the market, once started, is irreversible. 

Lilia Podolyak

Economy

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