The Supreme Court confirmed the insolvency of "Megabank" and annulled previous decisions

The Supreme Court confirmed the insolvency of "Megabank" and annulled previous decisions

The Supreme Court upheld the legality of the decision by the National Bank of Ukraine (NBU) to declare Megabank insolvent.

"On June 24, 2025, the Supreme Court, upon reviewing the cassation appeal of the National Bank, annulled the decisions of the previous courts and confirmed the legality of the National Bank’s decision to declare Megabank insolvent," - reports the regulator on Friday.

In its decision, the Supreme Court stated that the NBU acted within its powers as established by the laws "On the National Bank of Ukraine" and "On Banks and Banking." The regulator had the right to conduct inspections, make professional judgments, and declare banks insolvent if they did not resolve issues within 120 days after being recognized as problematic - even under martial law conditions.

The court emphasized that the NBU’s professional judgment is presumed accurate and is not subject to court review unless there are clear violations or exceedance of authority. This approach aligns with international practice, as the NBU possesses unique expertise in the financial sector.

The National Bank repeatedly warned Megabank’s management about serious risks, and the identified violations indicated the bank’s model was unsustainable in the context of capital, liquidity, and risk management requirements.

NBU representative Viktor Hryhorchuk noted that the bank’s problems arose before the war, and violations of regulations posed a threat to both clients and the stability of the financial system.

As reported, Megabank was declared insolvent on June 2, 2022; in August of the same year, significant shareholder Viktor Subotin filed a lawsuit seeking to have the NBU’s decision declared illegal and revoked.

However, the first and appellate courts questioned the regulator’s professional judgment, failing to consider its authority to withdraw banks from the market within the legally established timeframes. They also accepted the plaintiff’s arguments regarding force majeure circumstances, although these did not exempt the bank from complying with requirements that were in place even before martial law was introduced. As a result, these courts unjustifiably granted Subotin’s claim.

According to the NBU, the main shareholders of the financial institution as of January 1, 2022, were Viktor Subotin - 60.74% (direct and indirect ownership), the European Bank for Reconstruction and Development (EBRD) - 11.3%, German development bank KfW - 11.3%, Maxim Efimov - 9.8%, Olena Subotina - 7.8%, and the International Finance Corporation (IFC) - 4.5%.

According to the NBU, as of March 1, 2022, Megabank ranked 24th in terms of assets (11.1 billion UAH) among 69 banks in the country.