On 23 May 2016, the Board of the National Bank of Ukraine issued Decision No. 14 declaring Bank MIKHAYLIVSKIY Public Joint-Stock Company insolvent in accordance with Article 76 of the Law of Ukraine On Banks and Banking.
On 23 December 2015, Bank MIKHAYLIVSKIY PJSC was declared a problematic bank due to the Bank’s involvement in risky activities. Following the decision to declare MIKHAYLIVSKIY PJSC as a problematic bank, the NBU held talks with the bank's shareholders and managers in an effort to address the situation.
“On 20 May 2016, Mr Ihor Doroshenko, Chairman of the Bank's Management Board, notified the NBU of his resignation as Chairman of the Management Board. On the same day, the Bank informed the regulator that the bank's business day operating system was not working due to technical problems. The system was not working all day, which prevented the overseer’s (supervising officer’s) access to operational data. The system resumed operation only late in the evening on 20 May 2016. Upon gaining access to the operational data, the overseer detected a large number of transactions involving the transfer of individuals' deposits from the financial company related to MIKHAYLIVSKIY PJSC to the Bank. This move has increased the financial burden for the Deposit Guarantee Fund from UAH 1.6 billion to UAH 2.6 billion,” said NBU Deputy Governor Ms Kateryna Rozhkova.
In the event that the NBU detects that such transactions are performed by a problematic bank, the NBU is required to declare this bank insolvent in accordance with the Law of Ukraine On Banks and Banking.
All day long on Monday, 23 May 2016, MIKHAYLIVSKIY PJSC was denying the supervising officer access to the information which could confirm such transactions. It was not until late evening that the NBU Board issued a decision to declare MIKHAYLIVSKIY PJSC insolvent. The decision was delayed until late evening due to the need to collect compelling evidence to substantiate this decision. Despite the fact that the decision was taken on late Monday evening, the NBU notified the Deposit Guarantee Fund (DGF) of the situation in the Bank as early as on Friday, 20 May 2016. On Monday Morning, the DGF authorized officers arrived at the bank to exercise additional control on the ground.
During the said period, the bank’s correspondent account was blocked to prevent any attempts to siphon funds out of MIKHAYLIVSKIY PJSC. At the same time, the supervising officer received information on intrabank setoff/netting transactions. This information is currently being verified. Once the verification is complete, the NBU intends to provide information to the law enforcement authorities about the alleged mismanagement that led the bank into bankruptcy. The bank managers’ actions that have increased the financial burden for the DGF by as much as UAH 1 billion will be challenged in court.
As of 23 May 2016, 100% of the bank's shares are held by Ecosipan LLC. Mr Viktor Polishchuk holds a 92.5% stake in the said company. The remaining 3.9% and 3% of the company's shares are held by Mr Ihor Doroshenko and Mr Viktor Yerasov respectively. The NBU has not received any documents required for MIKHAYLIVSKIY PJSC’s merger with another financial institution.