Ex-bank head Ihor Gilenko still a fugitive from justice.
Ukrainian billionaire Dmytro Firtash has pledged to turn Ukraine’s notoriously troubled Nadra Bank, in which he this spring acquired a controlling 89 percent stake for about $400 million, into a market leader.
The announcement, made via an Aug. 15 statement, came days after the National Bank of Ukraine removed the bank from under receivership, allowing Firtash to install a trusted team of managers.
This is the only bank which single-handily lifted itself up from temporary administrative control under the National Bank of Ukraine.
– Dmytro Firtash
“This is the only bank which single-handily lifted itself up from temporary administrative” control under the National Bank of Ukraine, Firtash said in the statement.
Nadra is one of a handful of banks put under administrative control in the wake of the 2008 global financial crisis.
The bank’s turnaround, according to Firtash, “is the result of the work of a team of professionals, which will be strengthened significantly with new appointments to the supervisory and management boards.”
On Aug. 10, Nadra announced that Ivan Fursin has been named supervisory board chairman of Nadra.
Others appointed to the supervisory board include Vyacheslav Yakimuk, formerly head of Raiffeisen Investment in Ukraine, Anna Bezludna, a spokesperson for Firtash, British nationals Robert Shetler-Jones (CEO of Firtash’s holding company Group DF) and David Anthony Howard Brown (head of merger and acquisitions at the group).
Valentyna Zhukovska, who has managed the bank while it was under central bank receivership, retained her job.
Firtash first laid claim to Nadra in late 2008 during the global financial crisis, when the bank was on the verge of financial collapse and received hundreds of millions of dollars in central bank bailout funds.
To this day, investigations into how the bank’s funds were mismanaged and allegedly robbed by the bank’s former owners, top management and, reportedly, clients associated with influential businessmen, have not reached a full conclusion.
A proper investigation is still needed to find out what happened at Nadra, what went wrong going into the crisis, and how central bank money was used.– Oleksandr Zholud, senior analyst at the Kyiv-based International Centre for Policy Studies.
Ukrainian law enforcement in 2009 launched an investigation into the bank’s former head, Ihor Gilenko. But he fled Ukraine. His whereabouts remain unclear to this day.
Earlier this year, Ukrainian officials said Nadra needed some Hr 10 billion (more than $1 billion) in additional financial support to stay afloat, despite still having Hr 6.9 billion ($863 million) in outstanding obligations to the central bank for bailouts received since 2008, news agency UNIAN reported this month citing central bank information.
“A proper investigation is still needed to find out what happened at Nadra,” what went wrong going into the crisis, and how central bank money was used, said Oleksandr Zholud, a senior analyst at the Kyiv-based International Centre for Policy Studies.
Firtash acquired a controlling stake in Nadra this year via a share emission that was approved by the central bank. Zholud said the $400 million price tag Firtash paid for a controlling stake in the bank was a big “discount,” according to some estimates.
Nadra was one of the top 20 of 150-plus banks in Ukraine ahead of the 2008 crisis. As of April 2011, it had one of the largest bank branch networks (535) in Ukraine and was the 12th largest national bank with Hr 22.5 billion in net assets.
The bank’s statutory capital currently stands at just under Hr 4 billion ($500 million). It has 1,057 ATM machines scattered throughout Ukraine.
Firtash pledged to turn Nadra into one of the “top five” banks in Ukraine by 2013 and claims to have the will and sufficiently deep pockets to accomplish the task. He also has tremendous influence in Ukraine.
Firtash is close to the inner circle of President Viktor Yanukovych. He earned a fortune as co-owner along with Russia’s Gazprom of Swiss-registered RosUkrEnergo, a trading company that years ago supplied Ukraine with natural gas from Russia and Central Asia.
Firtash owns a 45 percent stake in RosUkrEnergo through offshore company Centragas Holding, the same company which this year became the controlling stakeholder in Nadra, taking over a 90 percent ownership stake.
Centragas is 90 percent owned by Firtash. A 10 percent stake in Centragas belongs to Nadra supervisory chairman Fursin. Serhiy Lyovochkin, head of Yanukovych’s presidential administration, has admitted to being a close friend of both Fursin and Firtash.
In recent weeks, Nadra Bank, which struggled to pay depositors money due in prior years, was chosen to handle banking operations for numerous assets controlled by Firtash, one of the largest employers in Ukraine.
The banking needs of his chemical companies, for instance, will be handled by Nadra, sources said. The bank was also chosen to handle banking operations for Ukrtransgaz, the state gas transportation company.
“When the shareholder [of a bank] becomes a large corporation and transfers its assets to be serviced under it, this is a strong stimulus for development of the bank and guarantee of its stability,” Firtash said in the Aug. 15 statement.
