Former PrivatBank top manager Yatsenko wasn't plucked from thin air. Photo from open sources.
Until late yesterday evening, the High Anti-Corruption Court was choosing a preventive measure for former First Deputy Chairman of the Board of PrivatBank Volodymyr Yatsenko.
He was remanded in custody until April 22 of this year and was given an alternative: bail in the amount of 52 million 210 thousand.
As a reminder, just a few days earlier, the NABU had literally snatched Yatsenko from the skies. He was attempting to fly to Vienna on Kolomoisky's plane. Just a few kilometers before the border, the plane was turned back and landed in front of cameras at Boryspil. Yatsenko himself was charged under Article 191 of the Criminal Code—abuse of office. He is accused of embezzlement of PrivatBank funds on an especially large scale.
Details of this criminal case, which Sytnyk's department is investigating, later emerged. It concerns the embezzlement of 136 million hryvnias, which the bank lost just before its nationalization in 2016.
The case is very high-profile in the public sphere and is being presented by the authorities, NABU, and its support group as a real breakthrough in the case of embezzlement of funds by the former owners of PrivatBank.
At the same time, if you study the details, a completely different picture emerges.
The case for which former PrivatBank top managers are now under suspicion is one of the most minor. The sum of $136 million is nothing compared to the $5,5 billion the state had to cover after nationalization (according to Kolomoisky's opponents, this is the amount the former owners withdrew from the bank).
Moreover, of the three individuals charged, only Yatsenko is in prison. The other two (former chairperson of the board of Dublet Bank and former first deputy head of Ingosstrakh, Elena Bychikhina) are abroad and are currently unavailable to Ukrainian justice.
Moreover, Yatsenko is one of the few former top officials at Privit who has broken ranks with Kolomoisky.
"The small amount of the embezzlement, the selectivity of the suspects, the arrest itself, which was "on camera," but legally "dirty" (Yatsenko was declared a suspect, but no preventive measure was announced)—all this raises suspicions that the case is a 'contract.' This is more about politics and PR than justice," says Rostislav Kravets, head of the Kravets and Partners law firm.
Therefore, it is still unclear what is most important in this story: to please Themis or to lull her to sleep, and also to show the Americans (who have long demanded an intensified investigation into PrivatBank and officially supported the filing of charges against former top managers) that “the case is moving forward.”
After all, this case does not pose any particular risks for Kolomoisky; in fact, it may even turn out to be profitable for him.
"The country" looked into the Yatsenko case.
Insurance for 136 million
Yatsenko is suspected under Article 191 of the Criminal Code—large-scale theft by a group of persons and abuse of office, which carries a penalty of up to 10 years in prison with confiscation of property.
We are talking about embezzlement of 136 million hryvnias.
PrivatBank lost them literally in the final days before nationalization. The money was paid as an indexation fee to the insurance company Ingosstrakh, which was linked to Kolomoisky and Bogolyubov, due to the rising dollar exchange rate. The deal was completed on December 16, 2016, effectively knowing that the bank would soon be declared insolvent.
Yatsenko himself, Dubilet, then chairman of the board, and Elena Bychikhina, head of PrivatBank's financial management department and first deputy chairman of the insurance company's board, were allegedly involved in preparing the deal.
As stated in a press release from the Prosecutor General's Office, "payment of such a commission was not provided for in the deposit agreements or supplementary agreements. Furthermore, the accrual and payment of remuneration were planned in violation of Article 52 of the Law of Ukraine "On Banks and Banking Activities," which stipulates that agreements concluded with persons affiliated with the bank cannot include terms that are not current market conditions."
The Prosecutor General's Office also stated that, to cover up the scheme, PrivatBank officials decided to disguise these banking transactions as legitimate: allegedly, back in 2014, the credit committee had decided to charge an indexed commission on deposits as part of the 2013 order "On the implementation of a new deposit with the payment of remuneration in connection with the growth of the hryvnia to the US dollar exchange rate." To achieve this, the committee's decision was allegedly retroactively falsified.
It should be noted that this episode is extremely minor in comparison to PrivatBank's billion-dollar schemes, which the international agency Kroll has already uncovered and detailed in its reports, and which are being used by the investigation into the former owners of PrivatBank in the US states of Delaware and Cleveland.
Let us recall: we are talking about the existence of a “double bank” and large-scale “credit pyramids,” when huge loans were issued to companies associated with the owners, transferred abroad, and used to purchase factories, real estate, etc.
Against this backdrop, the 136 million hryvnias involved in the case are mere pocket change. Moreover, it still remains to be proven that they are part of a larger PrivatBank scheme.
Nevertheless, the NABU, which has been investigating PrivatBank for several years, seized on this very episode.
"He's probably the most promising case for litigation: the deal was completed literally the day before the temporary administration entered the bank. Clearly, everything was done at the last minute, in a rush. Therefore, there are likely some flaws that could be exploited," a banking lawyer explained to us.
However, according to him, this episode doesn't actually relate to the PrivatBank schemes that the former owners are being accused of. Essentially, it's a local violation, and proving its "contribution" to the operation of the "dual bank" will be very difficult.
"Strange" case
Lawyers immediately had several questions about this case.
"First, why did this "faggot" emerge now? The incident itself occurred back in 2016, isn't particularly difficult to detect, and NABU has been working on the PrivatBank case for several years. "That is, by now, the case could have been developed long ago, and the suspects could already be serving their sentences," Kravets says.
Secondly, the selectivity of the suspects is surprising. As of today, only Yatsenko has been detained; Dubilet and Bychikhina have been placed under suspicion, but they are not in Ukraine. Allegedly, more "suspicions" are being prepared, but so far there are few specifics.
According to Kravets, all members of the credit committee at the time should be held accountable, since, even though the decision was made retroactively, "they all had to be contacted and their signatures collected." Questions also immediately arise for PrivatBank's senior management. At the time, the head of the supervisory board was former NBU governor Volodymyr Stelmakh, and the members of the supervisory board included Ihor Kolomoisky, Viktor Lisitsky, Gennady Bogolyubov, and Oleksiy Martynov, says Kravets.
"In fact, Yatsenko and Dubilet are on the suspect list, although it's unclear how much influence they had on the credit committee's work. In other words, they were picked based on their positions, without much investigation into who did what at Privatbank," Kravets added.
Thirdly, there are questions about jurisdiction—why is NABU, whose primary mission is to combat corruption, pursuing this case if PrivatBank was not yet a state-owned bank at the time the crime was committed, and the matter is more likely to involve violations within the framework of a business entity's operations than corruption.
Fourthly, Kravets notes that Yatsenko’s arrest was too demonstrative, although it was not carried out flawlessly from a legal point of view.
"He was given a faggot notice, but no preventive measures were issued. Which, in theory, allowed Yatsenko to continue his journey," Kravets notes.
All this, against the backdrop of the “pettiness” of the episode and the amount of “embezzlement,” according to him, makes one suspect that this case is clearly political.
"The $5 million fraudulent scheme for which former PrivatBank executives were charged is peanuts compared to the $5 billion in losses calculated by Kroll investigators, and it's not a given that this scheme is connected to the US investigation," noted Yuri Radzievsky, attorney and managing partner of Radzievsky & Partners.
"Ordered from Biden"
As a reminder, PrivatBank cases are pending in London's High Court and US courts. Moreover, in the cases being investigated in Cleveland and Delaware, the former owners of PrivatBank face serious prison sentences.
But, surprisingly, while attempting to recover more than $5 billion withdrawn from PrivatBank, Ukraine has been unable to present a single guilty verdict in this case to international courts from its own courts.
"This likely causes cognitive dissonance in foreign courts. It's not surprising that the London High Court even questioned its jurisdiction over this case. Although a similar case involving the withdrawal of 2 billion from Kazakhstan's BTA Bank proceeded relatively quickly, and Kazakhstan had already secured the seizure of international assets. But there, unlike our case, there was initially a local court verdict. Our situation is unique: billions of dollars are at stake, yet there hasn't been a single guilty verdict, and the former top management of PrivatBank continues to live peacefully and even engage in banking," says economist Alexey Kushch.
Therefore, in his opinion, even the "minor case" against PrivatBank, if the Ukrainian court ultimately leads to a guilty verdict, represents a major breakthrough in international court proceedings regarding PrivatBank. And a real opportunity to expedite them.
Another matter is whether such “acceleration” was ordered in the USA.
Opinions differ on this matter. Some experts believe there was no "order" at all. But there were hints. And our authorities got ahead of the game, starting to spin the case to please the US and the IMF, which had long been perplexed by the "imitation" of the PrivatBank investigation in Ukraine.
"Yes, it's true, the IMF has been pressing us on this issue for a long time. It's possible they decided to 'show off' successes amid the loan negotiations. But surely our international partners understand that this episode is, to put it mildly, 'unsuitable,' so they can only 'count' it if it marks the beginning of a further unfolding chain," says a banking lawyer who asked not to be named.
But whether PrivatBank's schemes will be exposed and whether it will lead to convictions remains to be seen.
"Despite the fact that the issuance of notices of suspicion to a number of former PrivatBank top managers was welcomed by both the US Embassy and pro-Western politicians and public activists, it's unlikely to be a significant 'breakthrough' in the case. Especially in the context of the accelerating investigations against Kolomoisky and Bogolyubov in the US. On the contrary, any progress in Ukraine on this case can be attributed to the fact that the US Department of Justice and the FBI are working much more actively than their Ukrainian counterparts. And the latter must somehow 'catch up' with this activity.
Why are there doubts about the “breakthrough” nature of the case?
Firstly, the paltry sum and its dubious connection to the investigation in the US.
Secondly, Kolomoisky and Bogolyubov have not yet been charged or served with notices of suspicion in Ukraine, unlike in the US, where they are said to be personally involved in the schemes. The absence of such charges allows the oligarch to launch a legal campaign against the US, accusing it of "expropriating legitimate investments."
Is Prosecutor General Iryna Venediktova personally blocking more in-depth research into the Kroll investigation into widespread abuses at PrivatBank prior to its nationalization, as activists claim? There's no direct evidence of this, but the lack of criminal proceedings against Kolomoisky personally speaks volumes about his political leanings," says Radzievsky.
Will Yatsenko lead us to Kolomoisky?
The prospects of the Yatsenko case, despite its apparent “simplicity” for the investigation, are not at all guaranteed.
Lawyers working in the banking sector say this case could be "spoiled," meaning it could end in high-profile arrests and "suspicions," while the trial itself will be delayed and ultimately result in nothing at all.
“This case is unlikely to be brought to completion,” Rostislav Kravets also believes.
"The case in which former top officials have been served notices of suspicion could fizzle out. Despite Venediktova's assurances that she has a complete understanding with the NABU and the SAPO on this matter, nothing prevents her from transferring the investigation from the NABU to the SBU or even the National Police. And then, 'dissolving' it in the bureaucracy wouldn't be too difficult," Radzievsky added.
The main question is why?
"To understand the underlying nature of this story, we need to go back ten years. Privatbank operated as a very successful and entirely transparent retail business, and then there was the corporate internal business, providing funds to Kolomoisky's companies and other businesses on legitimate terms."
The bank was profitable, but dividends weren't being paid, and profits were being funneled abroad. However, all the gaps were covered by a stable retail business. Everyone knew this, including the NBU. But no one touched PrivatBank. The main thing was to keep it under control, to prevent the "black" part of the business from exceeding the "white" part. PrivatBank's problems actually began after it had grown significantly, capturing 60% of the market. The authorities realized they had missed something after Kolomoisky began dictating his terms. For example, when they tried to crack down on Ukrnafta, a massive failure occurred in PrivatBank's terminals. Then they began thinking about how to "buy out" PrivatBank and began cultivating competitors (in particular, the "family" of then-President Viktor Yanukovych entered the banking business – Ed.). Even then, the IMF drew attention to PrivatBank's "unmanageability." But the actual nationalization after the change of power did not proceed very smoothly, and what remained behind the scenes were lengthy negotiations involving people from then-President Petro Poroshenko and Kolomoisky, and actual agreements.
"So, it's theoretically possible to unravel the PrivatBank case—the entire chain of events. But even if the defendants in the current case start talking, some ugly details could start to emerge. Among other things, the question of the legality of the nationalization could resurface, and there's plenty to dig into there. I'm not sure Zelenskyy is interested in that," says a banking lawyer.
This explains why the investigation zeroed in on Yatsenko. One theory is that he wasn't particularly familiar with all the schemes and isn't part of Kolomoisky's inner circle, meaning he couldn't possibly have revealed anything particularly "seditious" even if he wanted to.
And if the case does reach a real verdict, it will be limited to this particular episode involving 136 million, which will not bring us any closer to uncovering PrivatBank's billion-dollar schemes.
"Taming" Kolomoisky or a new scheme
Another nuance emerges in this case, which may be the real reason for the development of this entire story: Kolomoisky’s interest.
Strana has already reported that Yatsenko hasn't been "Kolomoisky's man" in recent years and wasn't part of Igor Valerievich's inner circle. Moreover, among his friends, he has spoken very unflatteringly about Kolomoisky.
"Now, after his arrest, his entire life is in the hands of Igor Valerievich. He'll help him with bail, legal representation, and thus bring him back 'to his family.' And NABU helped him with this," says one of Yatsenko's acquaintances.
Other defendants in this case, such as Dubilet, are abroad and are unlikely to be accessible to Ukrainian justice in the near future.
Therefore, on the one hand, a "legend" is being spread that the "Yatsenko case" will help trace the former owners of PrivatBank, specifically Kolomoisky. And, if not hold him accountable, then at the very least, his influence will be weakened. And the very fact that this case even surfaced is presented as proof that Kolomoisky is out of favor with the government.
But in reality, all of this could turn out to be a pure deal between Kolomoisky and the authorities.
"They're picking a minor incident that's not worth a damn, and their American partners and the IMF are at least temporarily satisfied, while the main figure is completely safe," our source says.
"There's another scenario, somewhat reminiscent of a chess gambit: the perpetrators (PrivatBank's top managers) will receive suspended or even actual sentences, and this will be presented to the public as a 'great achievement.' Meanwhile, the absence of charges against shareholders will be presented as self-evident. It's entirely possible that the issue will then move to the political realm, for example, through international contacts between Kyiv and Washington. The big question is whether the US has a greater interest in punishing Kolomoisky than in money laundering within American jurisdiction.
Of course, no one will agree to roll back the nationalization, but gradually relieving the former shareholders of $5 billion in "liabilities" is entirely possible. The lawsuit for damages, which even led to Kolomoisky's monthly expenses being limited and all his assets worldwide being frozen, will be heard in London in March 2022. And the likelihood of losing is roughly equal for both sides," Radzievsky concluded.
In topic: Who's next? Will Volodymyr Zelenskyy fight the oligarchs?
Counterattack. Why Kolomoisky Sued the US, and What Does Zelensky Have to Do with It?
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