Valeria Gontareva
Last week, Valeria Gontareva's friend, Chairman of the Supervisory Board and co-owner of Platinum Bank, Grigory Gurtovoy, was arrested in Israel. He is suspected of aggravated criminal misconduct, submitting false information in corporate documents, and money laundering.
(Read more about it in the article Valeria Gontareva. The Glitter and Machinations of the Queen of Coins)
Gurtovoy is a shareholder in the Israeli food company Willi Food. Law enforcement officials discovered that he attempted to withdraw $3 million from the accounts of a subsidiary of the company to invest in bonds of a certain European company. Local tax authorities suspect this sum was intended to serve as collateral for a "loan provided for the personal use of Grigory Gurtovoy or another person." The problem is that the company has other shareholders, whom the Ukrainian banker failed to inform of his intention to withdraw the funds. Gurtovoy was released on bail and banned from leaving the country for the next six months.
A similar story occurred with Gurtovoy's investment company, BGI: its minority shareholders also raised the alarm when they discovered that Gurtovoy was attempting to siphon off public funds rather than use them to pay bondholders.
The National Bank promised to review the information about Gurtovoy's arrest and conduct a further review of Platinum Bank's ownership documents. The NBU emphasized that the process of approving the bank's ownership has been postponed for the time being.
"We were already in the final stages of coordinating Gurtovy's acquisition of a significant stake in Platinum Bank. However, the latter is forcing us to conduct an additional investigation of the bank and also contact the Ministry of Internal Affairs for additional information," said NBU Deputy Chairperson Kateryna Rozhkova.
It's worth noting that Gurtovoy owned only 10% of Platinum Bank shares at the beginning of 2015, but he planned to expand his stake to a controlling interest by buying out his non-resident partners. However, the media has repeatedly noted that Gurtovoy is only the bank's formal owner. In reality, he represented the interests of Odessa businessmen Boris Kaufman and Alexander Granovsky, who are associated with Alexander Yanukovych. However, Gurtovoy himself denied this connection, claiming that his only connection to the notorious Odessans was their joint purchase of Focus magazine. However, he acquired some of his Israeli assets from Alexander Granovsky.
In any other scenario, this story could have sparked panic among the bank's depositors. But this doesn't seem to be a threat to Platinum. The bank, which had been designated a savings bank, has been struggling to repay deposits since early last year: rumors of a temporary administration have long been circulating. So the bank's reputation among clients was damaged long before Gurtovoy's arrest. To see this, one only needs to read Platinum client reviews posted on Minfin.
"The bank called and said I had THREE OPTIONS! Receive my USD deposit in hryvnia (the exchange rate is 20.5!!!) or in euros, paying a 2% commission. Or wait for the dollars to appear," said one Platinum depositor.
The bank isn't only denying deposits to individuals. In early October, MTS Ukraine attempted to withdraw its 250 million hryvnia deposit from Platinum. The money was not returned, after which the company filed a lawsuit, which ruled in its favor.
It's clear that Platinum's existence is blocking the process of restoring trust in the country's banking system: for almost a year, the bank has been violating its obligations to depositors, yet continues to operate. And now its board chairman has been arrested for financial fraud. The ownership structure is opaque. Why is Valeria Gontareva, who reported last fall on the purge of zombie banks from the banking system, closing her position on Platinum?
Bankers believe Platinum's unsinkability is due to the close ties of its beneficial owners and top management to NBU Governor Valeria Gontareva. Gontareva's company, Investment Capital of Ukraine (ICU), handled the sale of Platinum Bank to its current owners in 2013. Valeria Gontareva's business partner, Makar Pasenyuk, joined Platinum Bank's supervisory board.
"I have a long-standing business relationship with ICU. I've known the ICU team since their days together at ING. I have the utmost respect for them. I've repeatedly tried to recruit ICU's two current managing partners because I consider them to be among the best specialists in the market. I've also known Gontareva from her days at ING," Grigory Gurtovoy admitted a year ago.
According to Gurtovoy, he has lost contact with Gontareva—he might "make a comment on some event via SMS." However, the owners of Platinum Bank have another, much more powerful, link to Gontareva. Kateryna Rozhkova, who was appointed Director of the NBU's Banking Supervision Department on June 10, 2015, previously served as Acting Chairperson of the Board of Platinum Bank. In January of this year, she was promoted to become Gontareva's deputy.
Interestingly, Gontareva hired Rozhkova two months after law enforcement opened a criminal investigation into embezzlement at Platinum Bank. According to investigators, Rozhkova was involved in falsifying the bank's financial statements, siphoning off refinancing funds, and issuing fictitious loans. On June 20, 2015, the case was referred to the prosecutor's office.
The case materials directly implicate Ekaterina Rozhkova in fraud involving tens of millions of dollars. Between December 2013 and February 2014, Valeria Gontareva's subordinate siphoned $75 million from the bank to offshore accounts. This money belonged to the bank's depositors, who had been transferred abroad during the Maidan revolution.
"The charge (for Rozhkova) is large-scale fraud, with a sentence of 5 to 12 years," says Igor Lutsenko.
The scheme by which Gontareva's "right hand" siphoned off funds is quite traditional. The newly appointed deputy chairperson of the NBU issued loans to companies with signs of fictitious nature (Titan-Yug LLC, Osher LLC, FC Real-Invest LLC, Stratagema-Invest LLC, PP Logistik Trans, Kodos Invest LLC, FC Businessfinance LLC) totaling 1,1 billion hryvnias. The loans were secured by goods the companies were supposed to purchase abroad. Naturally, the goods never arrived in Ukraine. All the loan proceeds were transferred to the offshore company COROSAN TREDING LTD. These funds were subsequently used to buy out loan portfolios from other troubled banks.
The bank's management withdrew depositors' money, while continuing to actively "vacuum" the market, luring new clients with exorbitant interest rates. However, the pyramid scheme failed to hold together. In early 2015, the bank began to sink. Clients were gradually repaid hryvnias, but dollar deposits were virtually completely abandoned. And then Valeria Gontereva came to the bank's owners' aid: state funds began pouring generously into Platinum in the form of refinancing.
"The withdrawn funds, to put it mildly, did not contribute to Platinum Bank's stability. To save the financial institution, the state was forced to provide it with stabilization loans totaling UAH 240 million. Platinum Bank subsequently received a stabilization loan from the NBU in three tranches: UAH 100 million, UAH 200 million, and UAH 100 million," asserts MP Ihor Lutsenko.
Indeed, an audit conducted on July 1, 2015, revealed that, despite state support, the bank did not meet NBU requirements. Platinum was declared problematic. Nevertheless, the bank continues to take deposits from individuals at exorbitant interest rates. The National Bank has not responded, although it is clear that these funds will eventually have to be repaid from the Deposit Guarantee Fund.
"Subsequently, Platinum Bank's liquidity declined, but the NBU Board never declared the bank insolvent. In order to conceal Platinum Bank's persistent insolvency, Kateryna Viktorovna Rozhkova, who had previously served as Acting Head of the Board of Platinum Bank, was appointed Director of the NBU's Banking Supervision Department," the criminal case file states.
According to Igor Lutsenko, the head of the NBU is currently doing everything possible to cover up Rozhkova and, by extension, Platinum Bank. The criminal case against the former chairman of the board of the troubled bank has been hushed up. The MP believes that Gontareva has found a specialist in various illegal financial schemes in her new deputy.
"As for Gontareva's side, everything is quite obvious. It's a trend. The NBU leadership is suspected of 'asset stripping.' Specifically, the Rozhkov-Gontareva duo. After all, this isn't the first time assets have been siphoned off, even stabilization loans have been stolen," Lutsenko believes.
Meanwhile, journalist Alexander Dubinsky is confident that Gurtovoy's scandalous arrest in Israel will trigger a chain of high-profile revelations. Gontareva's connection to the beneficial owners of Platinum will come to light, revealing that Gontareva's National Bank not only facilitated the embezzlement of public funds but also worked in a corrupt partnership with financiers from Yanukovych's "family."
"The Platinum Bank story is essentially as fatal for Gontareva as Kononenko was for Poroshenko or Martynenko for Yatsenyuk. It's direct evidence of corruption among senior officials, which they stubbornly ignore and which is steadily dragging them down. Everyone in the financial market knows that Sasha Yanukovych is behind Platinum Bank, whose business is managed by Odesa businessmen Oleksandr Granovsky and Borys Kaufman," says Oleksandr Dubinsky.
Bankers are certain that this whole affair cannot but lead to the resignation of the NBU governor; Gontareva will prove too "toxic" for the President. Therefore, the National Bank will have to actively put out the fire in the near future; otherwise, Valeria Gontareva herself will go down with Platinum.
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