The National Bank of Ukraine’s (NBU’s) first deputy governor Kateryna Rozhkova and deputy governor Dmytro Sologub scored a legal victory against the central bank’s advisory council.
The Kyiv District Administrative Court on April 2 rescinded the reprimands and votes of no confidence that the NBU Council issued against the two officials in October. The NBU Council has already appealed the decision on April 19-20.
Rozhkova declined to comment for this article.
Last October, the NBU Council issued reprimands and statements of no confidence to Rozhkova and Sologub for talking to the media, including a 45- minute interview with the Kyiv Post about the NBU’s independence and Sologub’s comments to Interfax-Ukraine.
In its ruling, the court overturned the NBU Council’s decision, finding no evidence of wrongdoing.
According to court documents, NBU governor Kyrylo Shevchenko ordered his deputies to provide written explanations by September 30, following the interview with the Kyiv Post.
Rozhkova and Sologub replied on Sep. 29, saying that “they are policy speakers and have the right to communicate with the media on strategic issues of the NBU, including on the issue of the NBU’s independence.”
Following their reply, however, Shevchenko concluded that their actions did not comply with Ukrainian law and NBU regulations. At its meeting on October 2, the NBU Council agreed with Shevchenko, issuing reprimands and votes of no confidence to the two deputy governors. Shevchenko, who is a member of the council, voted for the reprimand.
At the time of the council’s decision, the central bank’s press service said that the deputy governors violated the central bank’s regulations and the employee code of ethics in talking to the media.
According to the court’s findings, the two deputy governors are not required to seek approval from the Department of Communications before speaking to the media.
As such, “the council’s allegations that the deputy governors violated the Code of Ethics for NBU employees are not supported by any evidence and are based on assumptions,” the court said.
The court also pointed out the fact that the article published in the Kyiv Post was not authored by Rozhkova and Sologub and that the article only contained a few of their comments alongside the Kyiv Post journalists’ own views and conclusions.
It also stated that the NBU Council did not provide the court with evidence that the two governors had damaged the image of the NBU in any way, nor any evidence of a loss of confidence in the public sector by foreign institutions or citizens.
The court battle is the latest chapter in a series of controversies within the NBU that have called into question its independence.
Shevchenko’s predecessor Yakiv Smolii resigned due to “systemic political pressure” last June. Since then, the bank has seen a wave of resignations, including deputy governors, department heads and other staff.
Sources in the banking sector, including NBU former employees, told the Kyiv Post last fall that they were disheartened because the bank’s new leadership attacked their prior achievements and that the NBU Council kept trying to meddle in their work. Most stopped short of saying that Shevchenko had basically told them to leave.
Deputy governors Kateryna Rozhkova and Dmytro Sologub are the last remaining members of the bank’s old six-person leadership team. They acknowledged that some want them gone, like NBU Council head Bohdan Danylyshyn, who said they should stop “clinging to their seats.”
Following the council’s decision to reprimand the two deputy governors, the NBU virtually stripped Rozhkova of most of her powers after the media scandal on Oct. 20, transferring her responsibilities to governor Shevchenko.
In March, Rozhkova claimed that the NBU tried to censor her again when the NBU’s press service tried to stop her interview with Ukrainian newspaper Novoe Vremya from being published in its original form.
At the end of March, the Prosecutor General’s Office confirmed that the State Bureau of Investigation is investigating NBU staff for embezzlement and abuse of office.
NBU independence is a major priority for macroeconomic stability and future cooperation with the International Monetary Fund, which has recently declared that Ukraine must do more to receive its next $700 million loan tranche.
