ICU and Avangard bank “appropriated” and put into circulation the money of the deceased Sberbank of Russia

Two men, 44 and 46 years old, instead of defending the motherland, if not with their own hands, then at least with a donation, organized a “startup” with state funds and pocketed hundreds of millions of hryvnias.

Just imagine that the court forecloses on the apartment of the deceased owner, and while the foreclosure continues, the realtor, who previously worked with the owner, continues to rent out the foreclosed apartment and pocket the money.

It doesn’t go over your head, does it? Nevertheless, a similar story happened with government bonds of the deceased Russian Sberbank in Ukraine.

According to the act of the bank, at the end of the day on February 25, 2022, it had UAH 26.9 billion of highly liquid assets (see document 1). Among them, UAH 10.7 billion are domestic government loan bonds and deposit certificates of the National Bank of Ukraine. There were about UAH 1.5 billion worth of deposit certificates, the National Bank of Ukraine (the NBU) paid them off and they “became” cash. And where is the rest?

In the response of the Individuals Deposit Guarantee Fund to ZN.UA’s request regarding what the fund received by accepting the Russian Sberbank, domestic government loan bonds were not mentioned at all (see document 2). After all the financial disturbances, as of May 2, the bank’s savings account at the NBU already contained UAH 16 billion, i.e., the mentioned domestic government loan bonds for UAH 9 billion maturing in February–March 2022 mysteriously disappeared from the balance sheets. This is our “apartment” of the dead bank.

It seems that all this time the specified securities were under arrest in the ICU company, but the arrest in no way prohibited operating with the funds received from the redemption of these securities, earning interest, and generously rewarding the company’s managing directors – Makar Paseniuk and Kostyantyn Stetsenko. Here they are -–our “realtors”!

You must have heard about the ICU company. Created by Valeriia Hontareva and Makar Paseniuk, it quickly turned into a so-called exclusive financial intermediary for elites (primarily from the entourage of then-President Petro Poroshenko) and a powerful player in the government bond market. The pocket bank of the ICU – Avangard, thanks to its skillful owner and Ms. Hontareva’s office as head of the NBU, has been feeling more than confident since 2015. The ultimate beneficiaries of the bank are the same Paseniuk and Stetsenko.

According to the law, UAH 9 billion invested by Sberbank in domestic government loan bonds should have been returned to the state in a special account at the NBU. But something went wrong. By the decision of the capital’s prosecutor’s office at the request of the National Police of the Podil District (?!), they ended up not in a special account, but under arrest. That is, all the assets of Sberbank went to the state, however domestic government loan bonds did not. Since it was the ICU that handled the financial operations of Sberbank, thanks to the arrest, the OVDP remained on the accounts in the ICU.

A domestic government loan bond, as you know, is a loan to the state, and the state, represented by the Ministry of Finance, has duly returned this loan, despite any arrests. The Ministry of Finance had no right not to transfer the funds under these domestic government loan bonds, and the holders due to seizure had no right to return the securities to the state and meekly accepted payments. They also did not return them, because the arrest is the same. According to the NBU, funds withdrawn from the Ministry of Finance (which, like all Sberbank property, generally belong to the state), are put into circulation by the ICU. Here is our “rental.”

Well, really, what’s the matter here – money has to work. Meanwhile, it seems that the money that has already migrated to the ICU account in the Avangard bank is invested in certificates of deposit of the National Bank, a favorite tool of our bankers. It’s like “quick money,” because the return on certificates of deposit at that time was 23% per annum. According to a source in the NBU, earnings from “renting someone else’s apartment” have already exceeded UAH 850 million. If the government, not a private company, earned money on these domestic government loan bonds, it could buy at least 3.5 thousand Mavic-3 copters, for example.

The icing on the cake is that already according to the official wording of the National Bank, which we had the opportunity to get acquainted with, Avangard directed the income, partially received from these investments in 2022, to the payment of remuneration to the final beneficial owners – Stetsenko and Paseniuk. As much as UAH 580 million for two people. They simply put the money in their pockets.

Of course, all this would not have been possible if it were not for the prosecutor’s arrest, which actually gave the ICU the money put into circulation.

Domestic government loan bonds of Sberbank were arrested at the request of the prosecutor of the Podil district Prosecutor’s Office of the capital within the framework of criminal proceedings No. 42022102070000059, opened on March 14, 2022 (see document 3).

Arrest provides for the prohibition of disposal and use of securities on the basis of the first and third parts of Article 170 of the Criminal Procedure Code of Ukraine. That is, we are talking about a temporary restriction in order to ensure possible confiscation. According to the data of the case, the justification reads as follows: “Existence of risk in decision-making by the management (of the bank. — Yu.S.) to the detriment of the state security of Ukraine.”

What kind of risk are we talking about if the Individuals Deposit Guarantee Fund entered the bank already on February 25, starting its liquidation and actually taking over all operational processes in the bank?

Why did the investigating judge, as well as the prosecutor, in their request, not consider that the owner of the property had already been changed at the time of the seizure? The legislation clearly states that from the day of the bank’s liquidation procedure, all the powers of its management bodies are terminated, and the bank’s managers are dismissed from their jobs. From the beginning of the liquidation procedure of the bank, all previous owners become former. Without any arrests, they are limited in the exercise of their own corporate rights, and as of March 14, they no longer had any relation to the activity, control, and management of Sberbank. And in general, what flawed logic allows seized securities to “feel” safer in the accounts of a private company than in an account of the National Bank of Ukraine?

The case in which the Sberbank’s domestic government loan bonds was arrested was opened by the investigator of the Podil Prosecutor’s Office under Part 5 of Article 191 and Part 2 of Article 110-2 of the Criminal Code of Ukraine. That is, we are talking about the appropriation and embezzlement of property by abuse of official position and the financing of actions carried out with the aim of overthrowing the constitutional order or seizing state power in Ukraine. How are the National Police and the Kyiv City Prosecutor’s Office related to this bouquet? It’s some suspicious jurisdiction. Well, let’s assume that the National Anti-Corruption Bureau of Ukraine and the Security Service of Ukraine have limited powers. But why was the arrest necessary, if at that time the bank was already managed by the Deposit Guarantee Fund? Moreover, why did we see the seizure of not all assets, but domestic government loan bonds? It’s some suspicious selectivity.

Of course, the Guarantee Fund had similar questions. It decided to ask them in the Kyiv Court of Appeal. But the dispute was lost — the court decision (see document 4) dated December 27, 2022, is final and provides no right for cassation appeal, cemented the prosecutor's arrest on the OVDP while the investigation continues.

What were the judges guided by? Why were the actions of neither the prosecutor’s office nor the investigating judge doubted? Oh, the answer may become obvious after realizing that ICU’s actually free use of nine billion hryvnias of other people’s money for its own earnings depends on how long the arrest imposed on them lasts. Are the margins shareable?

So far, only the National Bank has reacted to this whole story. According to the information available to ZN.UA, which is confirmed by a source in the NBU, the regulator managed to track the origin of the UAH 580 million annual bonuses of Paseniuk and Stetsenko. The regulator did not miss the fact that the decision on the award was made by the shareholder of Avangard Bank WESTAL HOLDINGS LTD, which is 100% owned by ICU Holdings Limited, whose owners are the same Paseniuk and Stetsenko. What the NBU discreetly calls a “conflict of interests” and “non-compliance with the legislation and the bank’s internal regulations regarding the remuneration policy” is simply called issuing bonuses to themselves.

The bank regulator reacted, according to our information, within the limits, so to speak, of its tools: it recognized the non-compliance of Paseniuk and Stetsenko with the “qualification requirements for professional suitability.” Accordingly, in May, Avangard Bank demanded to find a replacement for both of them in the bank’s supervisory board within three months.

Loss of business reputation and seats in the supervisory board in exchange for UAH 580 million is not such a bad deal. Especially in Ukraine, where the institution of business reputation is a mythical concept. Principally, Paseniuk and Stetsenko will seemingly keep the arrest with all its advantages, as well as control over the bank and ICU. Moreover, according to ZN.UA information from banking circles, they will appeal even the current, rather mild, punishment of the National Bank in the courts. Read the decision that the Deposit Guarantee Fund received in the appeal, and you will understand that they also have every chance to win.

Read this article in russian and Ukrainian.