Court of Appeal Finds no Reasonable Ground for Claims of the Shareholder of Bank Narodnyi Capital PJSC against the National Bank of Ukraine

On 13 March 2017, the Kyiv Administrative Court of Appeal denied the appeal of O. Voroniak, a minority shareholder of Bank Narodnyi Capital PJSC, challenging the ruling of the Kyiv District Administrative Court dated 13 December 2017.

According to the case materials, the shareholder of Bank Narodnyi Capital PJSC holding 8.6% shares of the bank filed a claim to review the lawfulness and cancel the NBU decision on declaring the bank insolvent and the decision of the Deposit Guarantee Fund on appointing provisional administration in the bank.

Having thoroughly examined all the case materials, the Kyiv District Administrative Court has reached the following conclusions:

• the NBU had all reasonable grounds to declare Bank Narodnyi Capital PJSC insolvent;
• the NBU’s actions regarding the said bank were legal;
• the regulator reserves the right to declare the bank insolvent on any day during the 180-day period;
• the minority shareholder of the bank pursuant to the law has no right to contest corrective measures imposed on the bank as a legal entity.

Hence, according to the resolution of the Kyiv Administrative Court of Appeal dated 13 December 2017 the claim of the shareholder of BankNarodnyi Capital PJSC O. Voroniak was denied in full. The Kyiv Administrative Court of Appeal affirmed the court’s decision.

Please be reminded that in July 2016, Bank Narodnyi Capital PJSC was declared a problem bank due to the non-compliance of the bank’s ownership structure with transparency requirements. During the period after the bank was declared a problem bank, it failed to bring its operations in line with regulatory requirements, despite the fact that the NBU has urged the bank and its shareholders to address this problem since December 2014. In January 2017, the bank made a decision on voluntary liquidation and submitted documents to the NBU for the approval of liquidation. Considering that at the time of submission of documents the bank was already declared a problem bank, the NBU could not accept the motion of the bank and on 19 January 2017 declared the bank insolvent.