Poroshenko’s con­fus­ing bank raises ques­tions and faces NBU scru­tiny

Kyiv Post Legal Quarterly - - Contents - By Jack Lau­ren­son lau­ren­son.jack@google­mail.com

That a ma­jor com­mer­cial bank here in Ukraine would choose to lo­cate most of its ATMS through­out Roshen con­fec­tionery shops and fac­to­ries might seem strange, but for In­ter­na­tional In­vest­ment Bank, or IIB — 60 per­cent owned by Ukrainian Pres­i­dent Petro Poroshenko — that's where the con­fu­sion be­gins.

On its web­site, IIB says they pro­vide a range of com­mer­cial bank­ing ser­vices to pri­vate and busi­ness clients. They list 24 ATMS across the coun­try, mostly in Kyivlo­cated Roshen choco­late shops (and one, strangely, at a Poroshenko-owned ship­build­ing cen­ter).

But lo­cat­ing IIB cus­tomers, clients or any­body who knows much about the bank is a dif­fi­cult task. In­vest­ment bankers in Kyiv say they don't have any deal­ings with the bank and don't seem sure what it's for.

One se­nior in­vest­ment banker who asked not to be named be­cause he's not au­tho­rized to speak with the press, sim­ply said “this is the pres­i­dent's bank” and didn't elab­o­rate.

The pres­i­den­tial ad­min­is­tra­tion did not re­spond to re­quests for com­ment.

Find­ing com­pany fil­ings and re­ports on the bank is equally dif­fi­cult, although the com­pany does dis­close some in­for­ma­tion on its web­site, it isn't in­de­pen­dently ver­i­fi­able.

Youcon­trol, an on­line ser­vice that ag­gre­gates of­fi­cial data from open gov­ern­ment sources and court registries here in Ukraine, has al­most no in­for­ma­tion on the bank, only that it has de­clared $9.7 mil­lion in au­tho­rized cap­i­tal. At the same time, as of Jan­uary 2018, NBU data shows that IIB has Hr 9.4 bil­lion ($334.3 mil­lion) in de­clared as­sets.

Where this money comes from, who it be­longs to and what it's be­ing used for re­mains less clear.

In most cat­e­gories re­lated to the com­pany's fi­nances, Youcon­trol re­ports that there is “no data in the pub­lic reg­is­ters.”

IIB aren't forth­com­ing with ex­tra in­for­ma­tion or ex­pla­na­tions. In fact, they come across as eva­sive and se­cre­tive. Un­like most com­mer­cial and in­vest­ment banks in Ukraine, IIB doesn't have a press ser­vice or pub­lic re­la­tions depart­ment. The bank de­clined mul­ti­ple re­quests for an in­ter­view, nor did they re­ply to mul­ti­ple of­fi­cial re­quests for com­ment. Some phone num­bers on their web­site don't work and when an em­ployee fi­nally did an­swer she said the bank doesn't en­gage with me­dia.

“We don't give com­ments or any in­for­ma­tion to the me­dia,” she said, de­clin­ing to give her name. “We sug­gest you use open data sources and me­dia to find your in­for­ma­tion.”

The shroud of se­crecy around IIB and the dif­fi­culty in ob­tain­ing in­for­ma­tion about the bank's clients, ac­tiv­i­ties and pur­pose is fu­el­ing spec­u­la­tion that it's a pocket bank for Poroshenko and his clos­est con­fi­dants.

Now, it also seems to have at­tracted the scru­tiny of the cen­tral bank.

NBU-IIB bat­tle

On March 28, Ukrainian news mag­a­zine Novoe Vre­mya cited court doc­u­ments when they re­ported that the Na­tional Bank of Ukraine had in­ves­ti­gated the IIB and de­cided to fine them.

The amount of the fine and de­tails of the al­leged of­fense are not dis­closed, but the NBU did say the IIB fine was jus­ti­fied, cit­ing "vi­o­la­tion of the prin­ci­ples of the rule of law, le­gal­ity, va­lid­ity and pru­dence."

IIB didn't take it ly­ing down. They re­sponded by launch­ing a counter-ac­tion against the NBU.

Novoe Vre­mya re­ports that IIB filed the law­suit against the NBU in Kyiv Dis­trict Court to chal­lenge the fine that same month, but since the spring there has been no up­date on the sit­u­a­tion and prac­ti­cally no me­dia cov­er­age re­lated to IIB.

Ear­lier this year, the NBU an­nounced a plan to con­duct a “sus­tain­abil­ity assess­ment” or “stress test” of twenty-five Ukrainian banks that be­tween them ac­count for 93

Peo­ple walk past the Roshen con­fec­tionary shop be­long­ing to Pres­i­dent Petro Poroshenko on Khreshchatyk Street in Kyiv on Sept. 28. (Volodymyr Petrov)

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