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Where there is no law, but every man does what is right in his own eyes, there is the least of real liberty
Henry M. Robert

What Made Victor Kravets Resign, or Backstage Games with Agricultural Loans

6 October, 1998 - 00:00


The Ukraine Agro-Industrial Bank Board of Shareholders has dismissed
Viktor Kravets from the post of Governor. As the bank press service stated
in its official report, this was according to Mr. Kravets' personal wishes
and in connection with his transfer to another job. Deputy Governor Serhiy
Podyk was appointed Acting Governor.

However, two weeks ago (when Kravets announced his intention to go),
bankers saw that his resignation had to do not with his being transferred
to another job, but with the bank's worsened financial position or problems
in communicating with authorities. Obviously, both versions have some grounds.
But let us consider the matter from the very beginning. It was Premier
Valery Pustovoitenko who provoked this new conflict involving the largest
Ukrainian bank. At a meeting with local state administration heads, he
announced his intention to propose shareholders to dismiss Viktor Kravets
because of the bank debts owed to the Budget. What the Premier meant exactly
is still unclear.

According to information provided by Bank Ukraine, it has no debts to
the Budget and regularly pays taxes. Also, we should not rule out the possibility
that Pustovoitenko meant the non-repaid loans issued by UAIBB (following
the Cabinet's instruction) to agricultural producers. The total amount
of loans is currently Hr 1 billion. However, according to The Day
source, nobody ever had doubts that these loans would be repaid. The same
source maintained that the money granted to the agrarians was just called
"loans", being actually nothing more than subsidization for unclothed and
barefoot agricultural producers. Leaving aside the analysis of factors
that caused such a situation (they are generally known), we should state
that the agrarians have remained as barefoot as before. According to unofficial
information, this resulted in Pustovoitenko's approving the decision to
knock out at least products - if not money - from the farmers (more than
1 million tons of grain have already been supplied to the Pension Fund
as debt repayment). They say that Victor Kravets was "very much" in disagreement
with the Premier, saying that if debts were repaid by grain, the banks
could then just as well say goodbye to their money. As the Premier had
not shown any sign of hesitation, Mr. Kravets decided to resign, explaining
his decision as follows: "A more vivid personality should be the [bank's]
leader. Having considered the situation, I decided that the bank would
better off if I go". While the vividness of the bank director's personality
can be widely discussed, it is unquestionable that he might have been more
amenable and obedient. Some more unofficial information seems to be interesting
against this contradictory banking and agrarian background. In Cabinet
lobbies, a joke is now circulating that someone already thinks about creating
two banks out of the Ukraine Agricultural and Industrial Bank. One bank
will be "awarded" with all unpaid farmer loans and other financial problems,
and then, officially and pompously, according to the letter of the law,
declared bankrupt. The other one will be fostered and cherished, and, eventually,
even privatized. Within this context, Kravets' resignation can be viewed
as the beginning of future perturbations. As far as the UAIBB administration
is concerned, its current leader may go down in the bank's history only
preceded with the word "acting". According to Infobank news agency, National
Bank Deputy Governor Oleksandr Kyreyev may be appointed as Governor. Or
he may not. The story continues.

 

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