Yakov Smoliy. Former NBU helmsman, millionaire, and "powerful old man." Part 1
Acting Governor of the National Bank, Yakiv Smoliy, looks like an ordinary Ukrainian, like hundreds of others on public transport. He could easily be mistaken for a university professor or scientist. However, Smoliy is Ukraine's first official millionaire rentier, having received millions from the sale of a minority stake in Aval Bank. His income for 2016 was 18,6 million hryvnias, and his bank account holds $4 million.
For a long time, Yakiv Smoliy remained in the shadow of regulator head Valeria Gontareva , serving as her first deputy. But almost three months ago, before going on vacation, the "unsuccessful" official handed over the honorary helm of the NBU to her ally.
Skelet.Org explains who currently controls Ukraine's wealth.
Yakov Smoliy. From Applied Mathematician to IT Specialist
Yakov Vasilievich Smoliy comes from Ukraine's finest region, the Ternopil Oblast. He was born on February 1, 1961, in the small village of Verbovets.
In 1978, Smoliy enrolled in Ivan Franko Lviv State University, majoring in applied mathematics. Just a year later, he found work as a laboratory assistant in the university's research sector. In 1983, he graduated with a degree in mathematics.
After graduating, the applied mathematician returned to his hometown and took a job at the Ternopil Institute of Finance and Economics (now the Ternopil National University of Economics). He worked there for four years as a mathematics instructor, even earning a junior research fellow's degree during that time.
In 1987, he quit his unprofitable teaching job and went to work at the Orion radio plant, where he took a position as a software engineer. Within a couple of years, he became the plant's bureau chief.
In the early 1990s, Yakiv Smoliy transferred to civil service at the Ternopil Regional Office of the National Bank of Ukraine. He was invited to fill a vacancy as head of the computer department, essentially an IT specialist overseeing software. Within three years, he rose to the rank of deputy head of the regional NBU.
The saga with commercial banks
Oleksandr Derkach, former Chairman of the Board of Aval Bank
In 1994, Yakov Smoliy joined the Aval Joint-Stock Postal and Pension Bank, joining a team of former Komsomol functionaries, Fyodor Shpig (Aval's Honorary President) and Alexander Derkach (Chairman of the Board). Back then, the bank's reputation was ubiquitous, offering large salaries, bonuses, financial assistance, and vacation packages.
Of course, working for a private company made far more sense than languishing in government positions. Yakov Vasilievich seized the opportunity and took a job at a financial institution, establishing communications between branches and managing process automation. But there was one catch. Aval was a scam of sorts—a couple of chairs and a few computers. The financial institution's employees devoted all their energy to field work, attracting clients and negotiating contracts. They were well paid for this. This tactic allowed them to assemble a high-quality management team. Moreover, Aval secured the support of Ukrposhta and the Pension Fund, which immediately opened the door to two powerful financial institutions.
Fedor Shpig, Honorary President of Aval
sources of financial resources. Billions of hryvnias began to flow through the bank's accounts, lending which in the 90s could generate incomes that would be incredible by today's standards—interest rates on loans often exceeded 50-60% per annum.
After a few months at Aval, Smoliy earned his first big payday—he was added to the shareholder register. The reason for Skelet.Org's unexpected promotion remains unknown. However, Smoliy would later say, describing the bank's operations, that "you can't steal from yourself." Moreover, the newly minted shareholder soon became the bank's deputy chairman.
In the wake of the financial crisis, Shpyg and Derkach propelled Aval to a leading position. It's worth noting that the bank lacked trained financiers or senior managers, but this allowed it to become a best-of-the-best bank in the country by the late 1990s. Yakov Vasilyevich's income also grew exponentially. By the end of 2003, he owned 2,96% of the bank's shares, and by the end of 2004, 1,25%, as the authorized capital increased from 500 million to 800 million hryvnias.
In 2005, Fedor Shpig and his partner, Alexander Derkach, sold Bank Aval to the Austrian group Raiffeisen International. The deal was worth a then-record $1,028 billion—approximately 3,7 times the financial institution's capital. Yakov Smoliy, of course, also sold his stake. He left the bank after the transaction.
The sale of Aval's securities to foreign investors made its shareholders, including Yakov Vasilyevich, legal dollar millionaires. By the most conservative estimates, a shareholder holding a 1,25% stake (in fact, the exact percentage was not disclosed) could easily have received $13,7 million from the sale.
Less than six months later, the former shareholders of Bank Aval registered a new financial institution, Prestige. Yakov Vasilievich became one of the bank's ten founders. His stake in the 300 million hryvnia authorized capital amounted to 7,28%. He also chaired the financial institution's Supervisory Board.
Prestige, as conceived by its founders, was intended to serve large private clients, or more precisely, manage their assets. At the time, this was considered a completely new direction. Within a short time, Prestige entered the top 20 leading banks, as presented by the Association of Ukrainian Banks in May 2006. Having built a client base, Shpig and Derkach, as the main shareholders, decided to sell their brainchild. A buyer was found immediately – the Austrian banking group Erste. Initially, an agreement was signed to acquire 50,5% of Prestige shares for $35,3 million, but a few months later, the Austrians purchased the remaining shares for $104 million. Smoliy sold his shares again and received a large sum for them. As for the position of head of the bank's supervisory board, he resigned before the transaction began.
The banking market immediately speculated that Shpih and Derkach were tasked by Austrian representatives with creating this bank to save money. Most likely, the Prestige scheme was developed during the negotiations for the sale of Aval. Thus, the Austrians acquired not a business, but a license. This means the payment was slightly different: capital plus a bonus for work performed – over $60 million.
After the sale of Prestige, Erste representatives demanded that the businessmen sign a document agreeing not to establish banks for three years.
Yakov Smoliy Confused...
Rivers of milk and banks of insurance
The ban on "stamping" financial institutions didn't deter entrepreneurs. They went into the dairy business, investing all the proceeds from the sale of their banks. It's worth noting that the co-owners of Aval and Prestige banks had previously provided loans to dairy processing plants and agricultural enterprises. Thus, they acquired:
- one of the largest enterprises is the Yagotinsky butter factory;
- Zolotonosha butter factory;
- Gorodenkovsky cheese factory;
- CJSC "Bashtansky cheese plant";
- Piryatinsky cheese factory;
- Varvabutter-cheese factory;
To ensure the operation of the enterprises, in 2006 the businessmen created the holding company "Milk Alliance" (Shpig owned 25% of the shares, and Derkach 15%), which united all the enterprises.
As for Yakov Vasilyevich, he not only received a share in the dairy holding, but also became a director of Prestige Group CJSC, the second holding company that was created with the goal of controlling all of Shpig and Derkach's businesses.
All areas of the entrepreneurs' activities were placed under the management of Prestige Group: dairy plants in the "Milk Alliance," three insurance companies—SK Etalon (established in 1993, authorized capital of 180 million hryvnia), Etalon Polis (organized in 2001, authorized capital of 118 million hryvnia), and the life insurance company Etalon Zhizni (established in 2003, authorized capital of 120 million hryvnia). Soon, SK Pusk and SK Astra were included in the holding, and Yakov Smoliy joined their supervisory boards.
Fedor Shpig and Oleksandr Derkach began skillfully juggling insurance companies, selling them to foreigners at exorbitant prices. They raked in millions, enriching all shareholders. In 2006, they sold Etalon Life Insurance Company to the Dutch group Fortis for €7,6 million. Yakov Smoliy owned 8% of the life insurance company's shares and retained a seat on the supervisory board, becoming its chairman three years later. It was only in 2013 that he stepped down after the insurance company was resold. They also parted ways with three other insurance companies: Pusk, Astra, and Etalon-Polis. The securities of these companies were bought out by other shareholders and their representatives on the supervisory boards. Such a large-scale sale sparked rumors that Shpig and Derkach were leaving the insurance market. However, they denied the reports, claiming that all of these insurance companies were technology companies.
The businessmen placed their bets on Etalon Insurance Company, which was generating excellent profits. It was given to Smoliy's family – Yakov Vasilyevich and his wife. It's worth noting that Etalon performed admirably. For example, in 2013, the insurance company paid out 35 million hryvnias in premiums alone. Despite this, Etalon suffered the same fate as its "brothers." In 2013, the insurance company was sold to Russian Gennady Duvanov, a leading insurance executive and the former president and founder of ASKO Insurance Company. Yakov Vasilyevich sold the Russian investor a 41% stake in the insurance company, and his wife, Svetlana, 25%. However, Duvanov lacked the funds to develop the business, and, according to unconfirmed reports, he withdrew. Skelet.Org, returned the insurance company to its former owners. They then sold it back to another oligarch.
In parallel with his insurance business, Yakov Smoliy developed the dairy business. In 2010, he joined the supervisory board of Molochny Alliance CJSC. He brokered a major deal to acquire Novoarkhangelsk Cheese Factory OJSC, where he also, as usual, joined the supervisory board. Yakov Vasilyevich resigned from this position on March 14, 2014, at his own request.
Smoliy also made his mark in AKPO Torgrichtrans (engaged in wholesale trade and leasing), where he owned 16,4% of the shares.
Arina Dmitrieva, for Skelet.Org
CONTINUED: Yakiv Smoliy. The New NBU Leader, a Millionaire, and a "Powerful Old Man." PART 2
Subscribe to our channels on Telegram, Facebook , Twitter , VK - Only new faces from the SKLEP section!