Three businesses controlled by Ukrainian billionaire Rinat Akhmetov were among 132 companies and individuals that suspiciously withdrew large amounts of money from a bank in Cyprus in the two-week period before the island nation imposed a bank deposit tax.
Made public by the Cyprus Communist Party newspaper, Haravgi, the list shows that Akhmetov’s companies withdrew more than $30 million from Laiki Bank from March 4 to March 14. This was followed by two weeks when banks were shut down because of plans to bail out crippled Cypriot banks with a controversial tax on big deposits.
Akhmetov’s System Capital Management holding company defended the move and denied benefitting from insider information.
SCM said the potential for financial crisis was extensively reported in the international media well in advance of European Union intervention. “Therefore, SCM management took prudent action to limit our banking exposure in Cyprus in the weeks and days in advance of the Cyprus debt restructuring,” the company said in a statement.
Since March 28, strict capital controls have remained in place in Cyprus. Central bank approval is required for transactions exceeding 25,000 euros (up from 5,000 euros during the first week). First planned for a week, experts say the controls may be in place for much longer.
An investigation in Cyprus is under way about potential abuse of insider information and regulatory failures that are behind the capital flight.
Altogether, the list showed that $916 million worth of deposits was withdrawn, many of which left zero balances on their accounts, including two of Akhmetov’s companies
DTEK Holdings Limited, part of Akhmetov’s SCM, emptied an account of 6.6 million euros ($8.5 million) on March 14. The same day, DTEK Trading Limited withdrew $3.5 million. SCM denied a report on April 2 in the Financial Times that companies owned by Akhmetov are clients of Cyprus President Nicos Anastasiades’ law firm. SCM said in a statement on April 4: “We believe that publication of articles of such quality is unacceptable in the business press. We regard them as libel and provocation and are set to defend our business reputation applying all legal ways including, if necessary, court proceedings.” Also listed was Follberg Invesments Limited, the mysterious 25 percent shareholder in Ukraine’s digital TV monopoly Zeonbud. Registered in offshore British Virgin Islands, Follberg withdrew more than $4 million on March 6. Ukrainian regulators have refused to say who really owns Zeonbud, fueling suspicions of corruption. Two Belize-registered companies with an identical address own the remaining 75 percent stake.
In turn, Anastasiades, the island’s president, urged judges to examine transactions handled by his family law firm as “a priority” to calm public outcry over the transfers by well-connected Ukrainians, Russians, and Cypriots, the Financial Times reported.
Earlier in March, SCM told the Kyiv Post that the Cyprus bank deposit levy “would not affect the financial standing of the SCM Group in any way.”
Kyiv Post editor Mark Rachkevych can be reached at [email protected].
