Expert: Director of the NBU Legal Department tried to hide violations committed by the National Bank against Concord Bank in his letter to the DGF

Oleksandr Zyma, Director of the NBU's Legal Department, by a letter from the National Bank to the Deposit Guarantee Fund, tried to illegally resolve the problems with the regulator's liability in court  for violations committed against Concord Bank. This situation is indicative of the DGF's manual management. This opinion was expressed in an exclusive commentary to UNN by Serhiy Lysenko, attorney-at-law, managing partner of GRACERS Law Firm.

Earlier, UNN learned from its own sources that the State Bureau of Investigation opened a criminal proceeding on the fact of possible abuse of power or official position, which led to serious consequences, by the director of the legal department, Oleksandr Zyma. The criminal case concerns a letter from the National Bank to the DGF signed by Zyma, who is also the chairman of the administrative board of the Deposit Guarantee Fund. In the letter, he recommended that the DGF drop four lawsuits that Concord Bank had filed against the NBU before the decision to liquidate the bank and introduce a temporary administration was made. The DGF implemented Zyma's recommendation.

"It's exactly like that  - one legal entity manually manages another legal entity in its own interests. Just using the fact that they work in the same field, and someone is called a market regulator. But this does not mean that the DGF has to follow the instructions of an official of another legal entity. In fact, this is the case, and this letter does not contain any justification, except for the general article of the law on the DGF and its objectives," Lysenko said.

According to him, since Concorde Bank filed lawsuits against the National Bank of Ukraine before the liquidation procedure began and the interim administration took over, the DGF is obliged to act in the interests of the bank's depositors, and therefore the bank.

"In this case, the NBU, if it committed violations (which are disputed in the lawsuits of Concord Bank - ed.), simply solved its problem in order not to prove its case in court, in fact, with one letter," Lysenko added.

The lawyer noted that, based on the plot of the criminal proceedings, there is a prospect that the indictment against Zyma, who signed the National Bank's letter to the DGF, will be considered by the court on the merits.

"I can see what evidence can be collected and where it can be collected, and I think that the prospect of what can be obtained is criminal proceedings on the facts of abuse or at least negligent actions on the part of the NBU executives, because these actions were committed solely in the interests of not the state, the NBU, but the officials who committed the relevant violations when the interim administration had not yet been introduced," Lysenko said.

Recall

Despite the war in Ukraine, the process of removing banks from the market has not stopped. Thus, as of February 24, 2022, the liquidation process was initiated against 8 banks. This year, for the first time in Ukraine, not only bankrupt banks but also profitable institutions were subject to liquidation and license revocation, including Concord Bank. The process of depriving a banking institution of its license takes place without a court. Of course, owners and shareholders of banks may appeal against the decision of the regulator, the NBU, after it has made a decision to liquidate the bank, but in general, the process of withdrawing a banking institution from the market, once it has been launched, is irreversible. 

In addition, the issue of liquidation of a profitable bank has not been regulated in Ukraine. According to Olena Sosedka, co-owner of Concord Bank, 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.