The NBU's decision to liquidate Concord bank was declared illegal, what's next. Lawyers ' response

The court of Appeal declared the decision of the National Bank of Ukraine (NBU) to revoke the banking license and liquidate JSCB Concord JSC illegal. It has entered into legal force, but due to the imperfection of Ukrainian legislation, it is impossible to return the bank to the market after the start of the liquidation process. However, shareholders can try to bring those responsible to justice, although this will be very difficult to do. This opinion was expressed in exclusive comments UNN by the interviewed lawyers.

Co-founder of Concord Bank Olena Sosedka posted a video on her Facebook page stating that the court of Appeal declared illegal the decision of the Board of the National Bank of Ukraine to revoke the banking license and liquidate the financial institution of August 1 , 2023.

Members of the board of the National Bank are responsible for making such a decision. However, lawyers interviewed by UNN point out that bringing to justice those responsible for making an illegal decision is complicated by the fact that it was collective, while legal liability should be personal.

"If the decision was made by a collegial body, then you understand that in this situation it will certainly be difficult to achieve satisfaction, that is, to punish those who voted collectively, collectively," said former Deputy Prosecutor General of Ukraine, lawyer Oleksiy Baganets.

He also added that the owners of Concord, after the court found that their bank was withdrawn from the market illegally, can demand compensation for the damage caused to them. "The injured party, whose rights and interests were violated, who suffered material damage – he has the right to apply to the court to be compensated for the damage caused precisely at the expense of the perpetrators," Baganets said.

Lawyer Alexander Beydik points out that in the case of Concord, the responsibility should be borne by members of the Board of the National Bank who voted to revoke the bank's license and liquidate it.

"Responsibility should be borne by the members - the composition of this board (members of the NBU board – Ed.). But I will tell you frankly  - it will be difficult to bring them to justice. It is very difficult, if not almost impossible," Baidyk said.

It is worth noting that the case of Concord is not an isolated one. In Ukraine, there have already been precedents when banks won courts against the NBU regarding the illegal revocation of licenses and liquidation. However, according to lawyers, due to the imperfection of Ukrainian legislation, even after the owners of banks withdrawn from the market prove in court that the NBU's decision is illegal, it is no longer possible to return financial institutions to work. The legislation simply lacks mechanisms for resuming their activities after the start of the liquidation process. This highlights the need to improve legislation and increase the responsibility of officials for decisions made.

"We really need to adopt some kind of safety net in the law in order to have a real opportunity to defend our right in court to seek compensation for the damage caused," Alexey Baganets stressed.

Recall

Earlier it became known that  Concord shareholders appealed in court the decision of the National Bank of Ukraine to withdraw the bank from the market. the Dnipropetrovsk District Administrative Court declared illegal and overturned the decision of the NBU to revoke the license and liquidate Concord bank. Later, this decision was confirmed by the appellate instance.

Despite the war in Ukraine, the process of withdrawing banks from the market has not stopped. So, since February 24, 2022, liquidation was Started in relation to 8 banks. In 2023, for the first time in Ukraine, not only bankrupt banks, but also profitable institutions were liquidated and revoked-We are talking about Concord bank. as stated by Elena a neighbor, at the time of the regulator's announcement of the decision to liquidate the bank, there were enough highly liquid assets in the financial institution to make all the necessary payments in 2-3 weeks. But the bank's liquidation process is strictly regulated by law and can generally last up to three years.