Ukraine court cancels its decision to arrest Bakhmatyuk assets

A Kyiv local court ruled on May 26 to cancel its own ruling to arrest all the property that belongs to businessman Oleg Bakhmatyuk, which it imposed on May 12 in response to a claim filed by the National Bank of Ukraine (NBU). Earlier, the NBU announced that its request to arrest Bakhmatyuk’s property was initiated in order to recover its loans worth UAH 4.0 bln provided to the failed Finansova Initsiatyva Bank, which was also controlled by Bakhmatyuk.

The property that faced arrest consisted of stakes in 72 companies whose ultimate beneficiary is Bakhmatyuk. Of them, 62 companies were reported as subsidiaries of Bakhmatyuk’s farming and food holding Ukrlandfarming (UKRLAN) in its 2015 annual report.

The court based its May 26 ruling, which canceled the arrest, on Bakhmatyuk not being a direct owner of the rights in any of the 72 companies. Bakhmatyuk’s defense also claimed that the NBU gave its loan based on collateral worth UAH 3.5 bln.

Alexander Paraschiy: Bakhmatyuk’s side has fulfilled its vow to defend his position in his dispute with the NBU. This news has dual implications for the stakeholders of Ukrlandfarming and Avangardco (AVGR LI). On the one hand, it’s good that the risk of interrupted operations of the holding’s companies was minimized. On the other hand, this is an illustration of the poor protection of creditors’ rights in Ukraine, which is a worrying signal for the bondholders of Ukrlandfarming.