The President of Ukraine has submitted Bill No. 2085, "On the Liability of Bank-Related Persons," to the Verkhovna Rada for consideration. This bill would give the National Bank of Ukraine and the Deposit Guarantee Fund free rein, according to the publication Delovaya Stolitsa. According to the proposed amendments, shareholders and top managers of banks are to be fined and imprisoned. Punishment could include intentionally driving banks into bankruptcy and asset stripping through lending to affiliated entities.
The NBU and the Deposit Guarantee Fund supported this bill. The Fund's Managing Director, Konstantin Vorushilin, asserts that most insolvent banks placed under temporary administration had no assets at all. Bankrupt banks such as Porto-Franco, Legbank, CityCommerceBank, and several others were practically penniless. Therefore, violations of the law committed by bank owners and management that threaten the interests of depositors and creditors are proposed to be punished with a fine of 2 to 5 non-taxable minimums, which would amount to UAH 34-85. If these actions lead to financial insolvency, those found guilty would have to fork out 5 to 10 non-taxable minimums, which would amount to UAH 170. Malicious intent in such actions would carry a sentence of up to five years in prison.
But the most interesting aspect of the proposed bill is that Poroshenko intends to obligate the owners (ultimate beneficiaries) of liquidated banks to be liable to depositors with all their assets. If it is proven that a financial institution failed as a result of the actions or inactions of shareholders, the Deposit Guarantee Fund will be able to sell off their assets and use the proceeds to pay depositors. However, experts believe the document is riddled with inconsistencies. For example, it is completely unclear how authorized representatives of the Deposit Guarantee Fund and the NBU will prove that the actions or inactions of the beneficiaries led to the bank's bankruptcy. It is also unclear how the bank's assessed value will be determined.
This bill also contains one very interesting detail. The document will not apply to banks whose liquidation estates have already been determined and approved. Therefore, Serhiy Kurchenko and Vadim Novinsky, whose banks, Brokbusinessbank and Bank Forum, have long been under temporary administration, will not lose their assets.
Thus, the bill proposed by the President will help the Deposit Guarantee Fund and the NBU seize assets from liquidated banks and sell them to interested parties at minimal prices. Experts believe this will mark the beginning of a new phase of redistribution of property and spheres of influence under the direct control of the NBU, the Deposit Guarantee Fund, and the President of Ukraine.
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