After the recognition of the insolvency of PJSC "Ukrainian Professional Bank" (UPB) in May 2015, the temporary administration discovered that instead of the 1.4 billion UAH of assets declared on the balance sheet, they actually amounted to less than 180 million UAH, while the total amount of declared creditor claims exceeds 1.1 billion UAH.
This was reported by the press service of the Deposit Guarantee Fund with reference to the director of the department for the investigation of wrongful acts, Kateryna Misnyk, as relayed by BiznesCensor.
According to the head of the Fund’s department, money was withdrawn from the bank using practically the entire spectrum of schemes: lending to affiliated companies, withdrawing pledged property, selling highly liquid real estate at undervalued prices, and "junk" securities.
"By all indications, PJSC "UPB" was a ’pocket’ bank that served companies controlled by its actual owner Anatoliy Yurkevych – the chairman of the board of directors of Milkiland-Ukraine. Practically the entire loan portfolio of the bank consisted of loans issued to controlled legal entities, including PJSC "Ukrainian Investment and Financial Alliance," PJSC "Eurofinance," Lanex, Inc., and these loans were obviously never intended to be repaid," the statement said.
In particular, the Deposit Guarantee Fund established that the bank issued a loan in the amount of over 13.04 million UAH in cash to an individual associated with its management and owners. At the same time, the borrower received funds through the bank’s cash desk daily in the amount of 150,000 UAH, and the "repayment" of the debt was carried out through internal operations during the financial crisis of the bank - by transferring funds from UPB’s current accounts without actually bringing real money into the bank.
"In a similar way – through internal bank operations without actual inflow of funds – five days before the introduction of the temporary administration in PJSC "UPB," ’netting’ of individual loans in the amount of 56.7 million UAH took place. This means that loans that had collateral were repaid using funds transferred from deposits in the same bank, and accordingly, the bank lost liquid collateral for these loans," explained Misnyk.
According to the head of the department, money was also withdrawn from the bank through another popular scheme – through a foreign bank. In particular, $10 million was withdrawn from UPB through Bank Frick&Co.AG (Liechtenstein).
Misnyk explained that the scheme was implemented as follows: as of June 30, 2015, the credit indebtedness of related parties of UPB amounted to 596.5 million UAH. The collateral for these loans was the property rights for the deposit of LLC "Logo Sphere" in UPB amounting to $10 million. Given the lack of ’live’ money in the bank, documents were signed between LLC "Logo Sphere" and PJSC "UPB," according to which LLC "Logo Sphere" actually received the right to dispose of UPB’s money on correspondent accounts in Bank Frick&Co.AG.
"The absurdity of the situation is that the right to dispose of UPB’s money on the correspondent account in Bank Frick&Co.AG was granted ’in exchange’ for LLC "Logo Sphere" not demanding the return of the deposit from UPB. As a result, $10 million from UPB on the correspondent account in Bank Frick&Co.AG were written off in favor of a company-non-resident," noted the head of the department.
According to the Deposit Guarantee Fund, due to these and other schemes, the estimated value of PJSC "UPB" assets turned out to be almost 78 times lower than the book value.
At the same time, as of February 1, the Fund paid depositors of PJSC "UPB" 639.12 million UAH, which constitutes 98.6% of the amount accrued for payment on guaranteed deposits.