Ukraine police adds pressure on Bakhmatyuk at central bank request

The Kyiv Prosecutor’s Office has opened a criminal case for possible misconduct by the managers of VAB Bank and its owner Oleg Bakhmatyuk, the press service of the National Bank of Ukraine (NBU) reported on Dec. 12. The case was opened at the request of the NBU and will be investigated by the Interior Ministry at the order of the prosecutor’s office, the report said. The NBU believes this case will be a starting point in the efforts of law enforcement bodies to prosecute top managers and the owners of failed Ukrainian banks.

Bakhmatyuk commented to Interfax-Ukraine the same day that the NBU release was a part of a PR campaign of the regulator’s head Valeria Gontareva aimed at destroying his holding company, Ukrlandfarming (UKRLAN). “She is not interested in resolving the conflict and recovering funds,” he said, referring to the estimated UAH 10.9 bln that Bakhmatyuk’s banks owe to the NBU. He said he had offered a resolution to improve the repayment of the obligations of the failed banks, but he claimed that Gontareva personally rejected such an offer.

Alexander Paraschiy: While we continue to view Bakhmatyuk as a business player who doesn’t inspire a lot of trust, we indeed see some opaque personal motives in the NBU’s actions. We believe that in trying to repel attacks from the NBU and police (whether or not they are justified), Bakmatyuk will be more inclined to seek more cooperation with the creditors of Ukrlandfarming and Avangardco (AVINPU), which is also positive for the companies’ bondholders. Namely, these next days could present an opportunity for the bondholders to ask for more transparency and investor-friendliness from Ukrlandfarming, as well as better conditions of the unavoidable debt restructuring.