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Court Approves Recovery of UAH 1.5 Billion from Former Owner of Bank Finance and Credit Kostiantyn Zhevaho in Favor of NBU

Court Approves Recovery of UAH 1.5 Billion from Former Owner of Bank Finance and Credit Kostiantyn Zhevaho in Favor of NBU

On 1 October, the Shevchenkivskyi District Court of Kyiv ruled to recover UAH 1.539 billion from Kostiantyn Zhevaho, the former owner of Bank Finance and Credit, in favor of the National Bank of Ukraine (NBU) to repay the debt of Bank Finance and Credit on previous refinancing loans.  At the same time, the court dismissed Kostiantyn Zhevaho’s counterclaim that sought to invalidate the surety agreement between him and the NBU.

In 2015, Kostiantyn Zhevaho, the then-owner of Bank Finance and Credit, signed a surety agreement with the NBU under which he personally guaranteed to repay to the regulator the refinancing loans his bank had taken out under a number of loan agreements.

Since Kostiantyn Zhevaho demonstrated his unwillingness to fulfill his obligations under the surety agreement in good faith, the NBU filed a lawsuit in December 2015 in order to recover the debt. Noteworthy, the trial has actually lasted for almost 3.5 years, as the opponent has used every opportunity to delay the verdict.

“In order to protect the rights of creditors, we need to continue implementing judicial reform. Judicial reform, among its other targets, aims to enforce compliance with reasonable time limits when reviewing cases and to introduce amendments to procedural codes. These measures will strengthen the responsibility of dishonest debtors for abusing procedural rights and delaying proceedings. The reform of the judiciary will reduce the times that courts spend on hearing lawsuits filed by creditors to at least three to six months. In addition, it will strengthen debtors’ payment discipline, which will eventually help resolve disputes with creditors,” said Serhii Boiko, Head of the Problem Assets Litigation Division at the Problem Assets Management Office of the NBU.        

After the court ruling has come into force, the NBU will take all possible legal measures to recover the funds in order to repay the bank’s debt. Today the total debt of Bank Finance and Credit to the NBU under all refinancing loans amounts to UAH 6.75 billion.

For reference

Note that on 17 September 2015, the NBU approved a decision to classify Bank Finance and Credit as insolvent.

At that time, the bank’s shareholder was Kostiantyn Zhevaho, who indirectly owned 97.67% of the shares.

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