Financial liability of those responsible for Ukrayina bankruptcy is still an open question
No sooner had a year passed than the receiver of Ukrayina, this country’s largest bankrupt bank, announced it is ready to begin to financially satisfy the demands of natural and juridical persons whose Ukrayina deposits exceed the state guaranteed compensation of five hundred hryvnias (as of the beginning of Ukrayina liquidation). But, as it became clear at the April 12 press conference hosted by Vitaly Strukov, acting chairman of the Bankruptcy Agency, and Oleh Nekriach, chief of the interim executive management of the Ukrayina receiver, the latter immediately ran into serious difficulties.
At this moment, the official receiver is short just a little — of approval of the bankruptcy schedule by the National Bank (NBU) and UAH 145 million — to satisfy the UAH 230 million total claims of first line creditors (under the law On Clearing the Arrears of Payments to Ukrayina Bank Depositors passed by the parliament on March 28 and recently signed by the president, this category includes individuals and companies that deposited up to UAH 50,000 with the bank without guarantees). Moreover, the bankruptcy agency is to pay off these 230 million before July 1 of this year. “We will pay if we must,” Mr. Strukov optimistically told journalists. “We are going to name — in the immediate future — the agent bank to effect the payments,” he repeatedly stressed, trying to convince the audience that the receiver is prepared to satisfy the first creditors in the legally stipulated period. To add more weight to his words, Mr. Strukov even cut the shortfall in the receiver’s accounts (which he himself had announced) to UAH 46 million or even — under favorable circumstances — to zero. To this end, he had to do a number of arithmetic operations unsophisticated but difficult to do in practice.
The agency expects to raise sixty million hryvnias “by selling Ukrayina’s state securities.” Who will buy them? This is not yet clear. In any case, Ukrayina has not yet received consent from the NBU, to which it had turned for help. Commercial banks? Rather unlikely, although Mr. Strukov himself is convinced of the contrary. “There is always a demand for securities,” he emphasized. According to the chief receiver, he will raise fifteen million by selling a consignment of Ukrayina’s non-banking property and another twelve at the expense of the bank’s real estate rents. This is quite possible, but the postponement of an open sale of “28 items assessed at their market value” (let us take Mr. Strukov’s word for this) until mid-May shows that the lawfully assessed property of a bank being liquidated is not much in demand in this country.
The official receiver pins great hopes on the government, particularly on the Ministry of Finance positive decision to pay UAH 23.7 million in cabinet-guaranteed “debt money” to Ukrayina. Will the ministry choose to bear extra-budgetary expenses, taking into account the budget fulfillment problems of this year? The question sounds a bit rhetorical. Another hope is that “Prime Minister Anatoly Kinakh has requested judicial and law enforcement bodies” to help the receiver accumulate the liquidation mass. This point undoubtedly deserves special attention. Mr. Strukov pointed out that the receiver had filed a total UAH 350 million in suits and claims against overdue and problem debtors. Yet, he claims, local authorities and courts are not exactly bursting to make decisions favorable for the Bankruptcy Agency. “If we assume that at least ten percent of our demands are met, we will gain 35 million hryvnias,” Mr. Strukov noted. Is it worth counting on the Cabinet of Ministers in this situation? The practice of government-supported dismissals of lawsuits against some debtor enterprises when Ukrayina was not yet bankrupt (which Oleksiy Poletukha, former chairman of the bank’s board of governors, now being prosecuted, told The Day) suggest otherwise.
Yet, this is not so important now. Asked by The Day, Mr. Strukov said that most of the 150 largest debtor firms no longer exist or are under liquidation. “About 900 million hryvnias out of one billion have been classified as bad debts,” he admitted after the press conference. The Day has more than once reported that some high ranking government officials were involved in the issue of certain problem loans. Prosecutor General Mykhailo Potebenko has also repeatedly promised to punish all the guilty. Will Themis catch these officials before July 1? I tend to have doubts.
Speaking of loans, surprising as it might seem, Mr. Strukov is confident that banks “in the top twenty” are interested in buying Ukrayina’s problem debentures, for they claim “they are able to return these loans.” Of course, the chief receiver did not discuss this subject in detail: a commercial secret, of course. Yet, this statement raises a host of questions. What is this? An attempt to finally bail out the debtor firms? Or the process that brought down Ukrayina, when, as People’s Deputy Viktor Suslov told The Day, the Bank Ukrayina was forced to pay the Ostarbeiter benefits withdrawn from Hradobank under an NBU loan that the Ministry of Finance had previously utilized to sell treasury bonds to the bank? Or could it be both together? It is little wonder that debenture operations on such a scale raise well justified trepidation in this country.
And, lastly, Mr. Strukov found it difficult to explain to The Day’s correspondent what the receiver is going to do to satisfy the second and third line creditors whose claims against Ukrayina are incomparably greater than those of “worse-off individuals.” To be more exact, he gave a predictable laconic answer, “To sell property if possible.”
