Industrial blackmail is a common practice in all civilized countries. Fraudsters might even plant a fly on a restaurant's plate to avoid paying for the meal. Some people deliberately buy apartments near airports to later sue for compensation for excessive noise levels. However, bank loan default scams are virtually impossible abroad due to strict laws protecting creditors' rights.
Ukraine, unfortunately, is far from Europe. And cases of banks being scammed for large sums of money are commonplace. Financial fraud has become a commonplace business, which, with the connivance of the judiciary, official corruption, loopholes in legislation, and the silence of the population, often successfully perpetrates bank scams, damaging the lifeblood of the country's economy, without which any state is doomed. And, most inexplicable to European minds, in Ukraine they don't hesitate to scam state-owned banks, where taxpayers' money is invested.
A principled defaulter
Particularly criminally talented, unscrupulous borrowers are devising ingenious schemes to avoid repaying multimillion-dollar loans to financial institutions. One such scheme, fortunately unsuccessfully, is being attempted by a certain public figure, Mikhail Strelnikov, who heads an organization with the promising name "Financial Literacy of Ukraine."
According to FinMaidan, Mr. Strelnikov and his wife, Oksana Vinograd-Strelnikova, took out large loans totaling approximately 3 million hryvnias from the state-owned (!) rescue bank Rodovid Bank. The loans matured in 2009 and 2010, but the Strelnikovs have no plans to repay the debt or pay late fees.
Instead, Mikhail Strelnikov decided to pose as a public figure and use force to force the bank to abandon its debt collection plan. On the one hand, Strelnikov is suing the NBU, demanding the liquidation of Rodovid Bank, while on the other, he is actively delaying enforcement of decisions to forcibly collect loans and accrued penalties from him and his wife. Without mincing words, the activist demands the revocation of the lending bank's license, simultaneously challenging a number of legal acts, and feeding his version of events to unscrupulous media. He dresses in the guise of a defender of public interests, speculating on the Euromaidan, forgetting that a clean credit history is a fundamental value for any European. The scale of his claims compels a closer look at the personality and biography of this truth-seeker.
The fate of the auditor
It's common knowledge that Rodovid Bank has a complex history, the twists and turns of which have been discussed so much that there's no point in repeating them. Different experts and journalists have different views on the reasons that led the bank to its precarious financial situation. But almost everyone cites the main one. It's unlikely that Rodovid would have needed a restructuring if it hadn't previously issued colossal loans to close politicians, businessmen, and employees—loans that no one initially planned to repay.
Mikhail Strelnikov also received one of these loans at one time. However, he was less public and active back then. From 2004 to 2008, he worked not as a public expert, but as the head of the internal audit service at Rodovid. His wife also served as an auditor there. He was involved in setting the penalty amount, which he now so loathes to pay. And it is the results of Strelnikov's work that are the subject of the NBU letter, in which the regulator expresses concern about the quality of Rodovid's internal audit. It's possible that the "family-run" internal auditors deliberately turned a blind eye to the bank's state of affairs.
Since the 3 million hryvnia loan (with the dollar exchange rate at around 5 hryvnias!) had already made its way into the Strelnikovs' pockets, the "controllers" couple weren't even deterred by dismissal due to professional incompetence: fortunately, their financial situation allowed them to feel comfortable.
However, dismissal from Rodovid did not change the Strelnikovs' decision not to repay the state-owned financial institution. Under the circumstances, the bank's lawyers were forced to initiate legal proceedings to enforce debt collection. And although every court has ruled in Rodovid's favor for five years, Strelnikov continues to delay the debt collection process, challenging the court's decisions. In total, Rodovid's lawyers have fought 10 court battles. The latest took place on September 12 of this year. Strelnikov once again attempted to delay debt repayment.
Claim to expertise
So why are Ukrainian judges so ineffectual in defending the property of Ukrainian taxpayers? And why do they continue to accept highly dubious claims that damage the state-owned bank? There's no hard evidence of corruption. Instead, there's Mikhail Strelnikov's vigorous public activity, which is apparently what's perplexing the courts. Television broadcasts, a blog on a reputable economic website. And ID cards from various organizations—not just the notorious "Financial Literacy of Ukraine," but also more exotic ones.
For example, the Consumer Protection Inspectorate, which last fall illegally issued a ruling levying a fine of UAH 13,3 million against a bank based on violations of the Law on Consumer Protection. However, on November 6, 2013, the Kyiv District Administrative Court ruled the ruling absurd and the inspection illegal. However, during the trial, a tantalizing fact was revealed: at the time the inspection was initiated, Strelnikov was an advisor to the head of the Inspectorate. The inspection itself was carried out at the request of our enterprising "hero"'s wife.
It's unlikely that such a strategy and tactics are consistent with the "moral ethos" of a champion of justice, but this doesn't stop Mikhail Strelnikov from positioning himself in the public eye as such. He also claims to be an economic expert. However, he confuses assets with liabilities and is unaware of banking legislation. He often feeds the media sensational stories that have nothing to do with reality. Recently, the "activist" claimed that Rodovid managed to secure a huge refinancing sum under the new government, but where it went remains unknown. Meanwhile, Strelnikov stubbornly refuses to see a minus sign in the table listing banks receiving funds from the NBU. This indicates, incidentally, that Rodovid not only didn't receive refinancing, but, on the contrary, repaid it! Such statements could only be made by an amateur or a manipulator—either out of ignorance or a deliberately distorted interpretation of the law. But an amateur cannot be an expert, and a manipulator cannot be a defender of public interests.
Several conclusions immediately suggest themselves from our history.
On trust in experts. Strelnikov's story is drawing to a close, because every twisted rope eventually comes to an end. Rodovid's lawyers have filed a criminal case with the prosecutor's office, initiating a criminal investigation into the deliberate embezzlement of public funds on an especially large scale. They plan to defend their business reputation in court by filing a lawsuit seeking compensation for a substantial amount of moral damages from the "activist." But as long as our courts, media, and public opinion listen to self-proclaimed "activists" without first examining their credit histories, the Ukrainian economy as a whole, and the banking sector in particular, will continue to slide into the abyss.
On the protection of creditors' rights. Financiers privately joke bitterly that if all delinquent borrowers repay Rodovid, the bank could be closed as having fulfilled its mission. And this applies not only to this financial institution. All Ukrainian banks incur losses, building up reserves for unpaid loans and employing staffs of lawyers who are forced to sue debtors for years. Therefore, the next legislature should focus not on forcing such borrowers to fulfill their loan obligations (they will have to repay them anyway), but on strengthening legislative protections for creditors' rights, especially those that rely on taxpayers' money. Only if the inviolability of property rights is guaranteed in the country will the economy have a chance to recover, even despite all the upheavals. Otherwise, real, not declarative, European integration, for which so much blood has been spilled, will remain a distant mirage for many generations of Ukrainians.
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