The Shadow Banker of Ukraine: How Volodymyr Stelmakh Controls Troubled Financial Institutions

The Shadow Banker of Ukraine: How Volodymyr Stelmakh Controls Troubled Financial Institutions

Former NBU head Volodymyr Stelmakh, through related persons, obtained control of small banks by using his influence at the National Bank.

This concerns Ukrinbank, AvtoKrAZbank and Stolichny bank, which have been declared bankrupt and became subjects of criminal cases.

The editorial team of 368.media examined this scheme in detail.

Stelmakh was invited to Kyiv by the first NBU head Volodymyr Matviienko, who left his creation in March 1992 but left “his man” there. Matviienko employed Stelmakh in order to count on his help in the future – and perhaps this was the key to Matviienko’s later success as a banker (in particular, as the founder and owner of Prominvestbank).

In 1993 the bank appointed Viktor Yushchenko as chairman, and his first deputy became Stelmakh. Thus, during Yushchenko’s six-year tenure, the official became head of the supervisory board of Brokbiznesbank. The Buriak family worked earlier at the Donetsk branch of the Soviet State Bank, where he became closely acquainted with Valentyna Arbuzova – the mother of Serhiy Arbuzov. Hence the good ties between the Buriak family and certain “Donetsk” figures, and this was also the reason for their very profitable sale of their Brokbiznesbank (2013) to oligarch Serhiy Kurchenko. From 2001 to 2007 the first deputy chairman of the board was Volodymyr Klymenko – who in 2010 became chairman of the board of PJSC Ukrinbank acquired by Stelmakh, which we have already written about.

By the fall of 2008 Stelmakh, together with the new National Bank head Petro Poroshenko, knew that many banks, mostly captive, were mired in problem loans issued to owners’ or front companies. In fact, Stelmakh was aware of a grand fraud in which many bank owners decided to take part. But instead of preventing the looming banking collapse, he allowed it to happen. Then the triumvirate Stelmakh–Poroshenko–Pynzenyk began generously giving massive refinancing to troubled banks — in total 77 billion hryvnias, which were never repaid. In March 2015 Valeriya Hontareva stated this, trying to shift blame for the squandering of multi-billion funds onto her predecessors. Allegedly, refinancing was issued for “kickbacks” that ranged from 10 to 20% of the amount.

At that time the NBU provided 5,3 billion hryvnias of refinancing and a stabilization loan to Prominvestbank (Matviienko), almost 2,9 billion hryvnias to Brokbiznesbank (Buriaks), over 2 billion hryvnias to PUMB (Akhtemov), 7 billion to Privat, about 5 billion hryvnias to Finance and Credit bank (Kostiantyn Zhevago), over 1 billion hryvnias to Kyiv bank (the Marchenko family). But the brightest example of an artificially created banking crisis and the theft of huge sums through refinancing was the story of Nadra bank. Control over it in 2008 was exercised by the Segal brothers, Serhiy Lahur and its manager Ihor Hilenko. Then Nadra bank received 7,1 billion hryvnias of refinancing from the NBU! The scandals around Nadra did not end there: when it became known that oligarch Dmytro Firtash was acquiring the bank, some details of ties between Volodymyr Stelmakh, Dmytro Firtash and the company RosUkrEnergo emerged, information appeared about Stelmakh’s Austrian real estate and his business meetings there. There was also a hint of a possible link between Stelmakh and international mobster Semyon Mogilevich (all owners of Nadra turned out to be his people). In December 2010 the Verkhovna Rada did dismiss Stelmakh “due to reaching retirement age” (which he reached back in 2004). So as not to upset the elder, Viktor Yanukovych even appointed him his adviser: first as a staff adviser, then as an external adviser. Herasymenko – a very colorful figure, by the way, also from Sumy. From 1984 he worked in the KGB (later in the SBU), in June 2007 he became head of the SBU investigative department. Numerous stories circulated about his corruption: he stole and sold physical evidence and seized contraband, opened and closed criminal cases on order, and he “got caught” stealing documents about contraband of expensive foreign cars involving Ivan Baloga – whose brother Viktor Baloga then became head of the presidential secretariat. After that Herasymenko was dismissed from the SBU and was soon picked up by Stelmakh and Klymenko.

Ukrinbank is the brainchild of former NBU head Volodymyr Stelmakh and SBU deputy head Mykola Herasymenko. At the time, the media wrote that the bank was always a “laundromat” for the Party of Regions, in particular the Luhansk group. The chairman of the board Volodymyr Klymenko was and is in the “gold” circle with Yefremov, Tykhonov, Demishkan, Chechetov, Illiashov, Lukash and other lawbreaking citizens. Klymenko, together with Demishkan, for many years ran a large-scale scheme with Ukravtodor, which, it turned out, bought 100% of the bitumen used across Ukraine from a company called “Bureau Einstein.” At the highest level the “cover” of Ukrinbank fell within the sphere of influence of Viktor Pshonka’s family, the loyal “prosecutor” of the Yanukovych family. This bank likely played the most active role in laundering the money of high-ranking members of the Party of Regions.

How the bank takeover occurred. NBU resolution No. 273 and draft law No. 0884, which provide for a serious increase in regulatory requirements for existing banks and the charter capital of newly established banks, were lobbied by Stelmakh. As a result of these changes, about 30–40 small banks are to leave the financial market. And a person with money who understands banks and has connections at the NBU will be able to make a number of profitable purchases. The shareholders of Ukrinbank were Serhiy Kryvosheia (37,72%) and Serhiy Rys (37,72%). In 2007 they agreed to sell their bank to the Israeli Bank Hapoalim Group for 125 million euros, but the crisis spoiled those plans. Ukrainian bankers needed a refinancing loan; one of the conditions for obtaining the funds necessary to return deposits taken under guarantees of the bank owners was their sale of the controlling stake. After receiving NBU refinancing of 500 million hryvnias, the composition of the bank’s shareholders changed. Then 11% of the bank’s shares went to foreign investors, among them State Street Bank and Trust Company (USA, 6,05%), UniCredit Bank AG (Germany, 2,84%), The Bank of New York Mellon (Belgium, 1,2%). In addition, the bank’s shareholders included Volodymyr Klymenko (9%), Yurii Kulachek (9,1%), Oleksandr Sorochynskyi (9,1%) and Oleksii Morozov (9,1%).

The interests of the former NBU head in the institution are represented by top manager Volodymyr Klymenko. At one time Stelmakh lobbied for his appointment as head of the supervisory board of AvtoKrAZbank and as temporary administrator of BIG Energia bank. They tried to attach the Sumy bank Stolichny of Yevhen Antypenko and Serhiy Tkachenko. Like Ukrinbank, these institutions were given short-term loans from the NBU obtained through refinancing during the period from 2008 to 2009. AvtoKrAZbank was granted over 40 million hryvnias, and Stolichny about 36 million hryvnias. Stelmakh planned to merge the institutions into one with assets of about 3 billion hryvnias and equity of 430 million hryvnias. Next they planned a private placement of shares of the merged bank to attract foreign shareholders, although very specific people would stand behind them. That would make it easier to conceal the real owners of the bank and explain why the bank so easily attracts nonresident deposits.

At the head of Ukrinbank the Klymenko–Herasymenko duo developed several methods of not entirely legal enrichment: raider takeovers of enterprises that took loans from the bank (LLC Bila Akatsiia, Vinyfood, several shopping centers), non-repayment of refinancing issued by the National Bank (over 700 million hryvnias) in 2014–2015), the banal “scamming” of their depositors, and even “scamming” other banks for money (for example, Fidobank).

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