Ukraine court rules to arrest Bakhmatyuk in absentia

29 May 2020

The appellate chamber of the High Anti-Corruption Court of Ukraine ruled on May 28 to arrest in absentia the individual who controlled VAB Bank in October 2014, the court’s website reported the same day. Media identified the individual as Oleg Bakhmatyuk, the bank's former owner, the current owner of Ukrlandfarming (ULRLAN) and the majority shareholder of Avangardco (AVINPU, AVGR LI). The ruling allows for INTERPOL to begin an international search for Bakhmatyuk, the Anti-Corruption Centre said the same day.


As his response, Bakhmatyuk called the ruling unlawful and illogical, according to Ukrlandfarming press-release on May 28. Alleging political bias, he referred to the same court’s refusal to arrest two former top officials of the Yanukovych government. He alleged the ruling was made under pressure from National Anti-Corruption Bureau (NABU) Head Artem Sytnyk, who has personal animosity to him and is seeking personal revenge. He also claimed the ruling has stopped his efforts to return his banks’ debt (recall, earlier Bakhmatyuk claimed he was ready to repay UAH 8 bln of debt of his two failed banks to state bodies). Bakhmatyuk promised to defend his rights in international courts.


Recall, Bakhmatyuk has been named a suspect by NABU in a conspiracy that has led to the misappropriation of UAH 1.2 bln of a refinancing loan taken by VAB Bank from the central bank in October 2014. Other suspects in the conspiracy are former top officials of VAB Bank and the central bank. Bakhmatyuk has not returned to Ukraine since NABU opened this criminal case in November 2019. Bakhmatyuk is currently residing in Austria and his residence is well known to Ukraine's anti-corruption bodies, he commented to Interfax-Ukraine.


Alexander Paraschiy: As we discussed in our Nov. 25 note, we see poor chances for law enforcement bodies to prove a criminal conspiracy in the VAB Bank case. Therefore, we see the court’s ruling to arrest Bakhmatyuk in absentia as unnecessary. Firstly, it won’t change anything for Bakhmatyuk. Secondly, it will allow him to claim more effectively that he is being pressured politically or personally, giving him more ability to defend his position in the international courts. Thirdly, this will provide a basis for Bakhmatyuk to officially step out of his UAH 8 bln debt resolution offer to state entities, as well as delay debt restructuring to international creditors.


Ultimately, the ruling enhances the negotiating leverage of Bakhmatyuk and casts the latest shadow over the new anti-corruption infrastructure of Ukraine. At the same time, none of this changes much the prospects of Bakhmatyuk’s farming and egg businesses in Ukraine, which are very fragile anyway.

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