Ukraine police finds no VAB Bank crimes, Bakhmatyuk claims

A police investigation of alleged misconduct by the managers of VAB Bank and its owner Oleg Bakhmatyuk found no evidence of crimes, the Interfax-Ukraine news srevice reported on Jan. 5, citing the press service of Ukrlandfarming (UKRLAN). “Instead, it was proven that management took actions aimed at fulfilling the bank’s obligations to timely repay deposits,” the company said.

Bakhmatyuk told Interfax-Ukraine that he expected such a result, stressing that the recent investigation was initiated by the head of Ukraine’s central bank, who wants to bring damages against the shareholders and creditors of Ukrlandfarming and Avangardco (AVINPU, AGVR LI). So far, the National Bank (NBU) has not commented on the results of the police investigation.

Recall, the NBU reported on Dec. 12 that at its request, the Prosecutor General and Interior Ministry launched an investigation of the owners and managers of VAB Bank, which was recognized as insolvent in November 2014. The regulator said it could have served as a starting point in the prosecution of the top managers and owners of other failed Ukrainian banks.

Alexander Paraschiy: The successful prosecution of well-known owners of failed banks – like Bakhmatyuk or Kostiantyn Zhevago (key shareholder of Ferrexpo) – indeed could have become a good demonstration that misconduct in banks would not go unpunished. But these oligarchs have proven they are hard nuts to crack, largely because there is no clear political will to punish them.

Now the losses related to Bakhmatyuk’s banks (about UAH 18 bln, based on his estimates) pale in comparison to the capital gap related to failure of Privatbank, which has already cost the state UAH 107 bln. So Bakhmatyuk’s case cannot be a priority anymore if Igor Kolomoisky is on the loose. In any case, we expect the NBU will continue pressuring Bakhmatyuk, while we do not expect such pressure will have any effect on his farming assets.