Would you lend $90 million to a man accused of cheating Ukraine of nearly $1 billion?
State-owned Oschadbank would answer yes, it appears, regarding former Bank Mikhailivsky owner Viktor Polishchuk, who met with the Kyiv Post last month in a logistics center outside Brovary that he mortgaged through Oschad.
Polishchuk’s tenure as owner of the failed Bank Mikhailivsky is emblematic in Ukraine of the catastrophe that is the country’s banking sector. Mikhailivsky offered deposits at astronomical interest rates and used the money to engage in widespread related-party lending. Days before the bank collapsed, Polishchuk sold his share in the bank.
The National Bank of Ukraine – the banking regulator – had both an inside view and regulatory control of the bank for months before its collapse, and did nothing. NBU Governor Valeriya Gontareva has called for Polishchuk’s arrest, and recently said that he cost the government Hr 23 billion ($900 million).
Viktor Polishchuk at his Brovary logistics center on Oct. 5. (Kostyantyn Chernichkin) (Volodymyr Petrov)
In an exclusive interview with the Kyiv Post, Polishchuk denied any wrongdoing at Mikhailivsky, saying investigators should look at Platinum Bank. He denied any association with members of fugitive ex-President Viktor Yanukovych’s “family,” despite documented evidence of business ties to the disgraced regime.
Polishchuk sold his stake in Mikhailivsky one day before it collapsed in May. Duped depositors have been protesting in Kyiv since the bank’s destruction. They even closed Khreshchatyk Street in one Nov. 3 demonstration.
ICU ties
When Polishchuk bought Mikhailivsky in 2013, the bank added to his small empire of assets. The Kirovohrad-born businessman already owned the Gulliver shopping center on Kyiv’s Sportyvna Square, and bought Mikhailivsky the same year he acquired the El Dorado chain of electronics stores.
Mikhailivsky offered annual interest rates of 25 percent on deposits, and in 2015 saw its deposit base double to Hr 1.1 billion.
Polishchuk bought Bank Mikhailovsky from Ruslan Tsyplakov, a Ferrari driver known for his friendship with Yanukovych’s son, Oleksandr, and his chairmanship of the board of the now-insolvent PivdenkomBank.
Tsyplakov also co-owns the Gulliver skyscraper on Sportyvna Square in Kyiv with Polischuk, through a firm called “OOO Tri O.” When asked about Tsyplakov, Polishchuk denied knowing him.
“This is the first time I have heard this family name,” Polishchuk said. “Go to a restaurant in Gulliver, and every third person there, especially after a drink, will say they’re an owner of Gulliver.”
Polishchuk’s wife, Liliya Rezvaya, is rumored to be the niece of Russian Prime Minister Dmitry Medvedev. When asked about this, Polishchuk would neither confirm nor deny.
“You know, we’re all the third or fourth generation of someone,” he said. “Does it matter today?”
But Polishchuk happily acknowledges acquaintances that remain in political favor.
In 2015, Polishchuk attempted to purchase the All-Ukrainian Development Bank – formerly owned by Yanukovych son Oleksandr – after winning an auction to buy the bank from the Deposit Guarantee Fund.
The deal was stopped after it was revealed that the shares intended to be sold to Polishchuk were frozen as part of a criminal investigation into Yanukovych.
Investment Capital Ukraine chief Makar Paseniuk had been advising Polishchuk on the attempted purchase.
“I was told by NBU staff, that Mr. Paseniuk would take Polishchuk by hand, and walk him around the NBU and say ‘Ms. Gontareva, this [bank] is not a vacuum cleaner,’” said Poroshenko Bloc member of parliament and financial services committee member Pavlo Rizanenko.
At the time, the NBU had full access to Mikhailivsky. A curator entered the bank in 2015, giving the regulator full control over the bank’s operations.
Polishchuk said that the curator had been at Mikhailivsky for more than a year before its closure.
Paseniuk, who was managing the segment of President Petro Poroshenko’s assets located at ICU and defended him in the wake of the Panama Papers scandal, also appears with Polishchuk in a video leaked in December 2015. In the video, Polischuk appears to discuss threatening 112 owner Andriy Podschipkov with “the fate of [Oles’] Buzina.”
ICU provided the Kyiv Post with a statement saying that Paseniuk was uninvolved.
Polishchuk’s take: “Makar Paseniuk is an excellent financier.”
Land deals, bad loans
Over the summer, it briefly seemed that the dragnet was closing on Polishchuk. Mikhailivsky’s former general director, Ihor Doroshenko, was arrested in August on fraud charges, and now faces up to five years in prison.
But in September, the pressure seemed to wane. At a Rada financial services committee session on Sept. 22, Kyiv prosecutor Pavlo Kononenko said that Polishchuk had fled Ukraine.
Polishchuk met with the Kyiv Post at first to prove that he remains in Ukraine. The interview took place at a logistics center he owns on the outskirts of Brovary. Built in 2015, the center was largely empty. It is owned through a company called Tekhenergotreyd, which Polishchuk has used since 2004 to run his electronics retail business.
The company received a $90 million mortgage in May 2015 for the center from Oschadbank.
The mortgage came months after Kyiv prosecutors froze 94 hectares of Tekhenergotreyd land in Brovary amid as part of a land fraud probe.
Oschadbank did not reply to requests for comment before publication.
Mikhailivsky gave loans to companies associated with Tekhenergotreyd. According to state registries, for example, the bank gave a $5 million loan to a firm called Inter-profit, which shares the same director as Tekhenergotreyd.
When asked about insider loans at Mikhailivsky, Polishchuk called it “made-up information.”
Look at Platinum
Protests against Mikhailivsky have mainly focused on the Deposit Guarantee Fund, which initially refused to pay out the Hr 200,000 insurance limit to depositors. Under one of Mikhailivsky’s more notorious schemes, the bank placed depositors’ cash in a company called the Investment Calculation Center, meaning that the money was not eligible to be insured by the Ukrainian government.
As the bank began to collapse, money from the Investment Calculation Center was shifted back into Mikhailivsky, placing the burden on the state. The NBU claims it was unable to see the transactions due to a software error.
As Polishchuk tells it, there were no grounds for an investigation into his activities at Mikhailivsky, since he sold his share before it collapsed.
“The credit portfolio that has caused people to protest…all of it was transferred to Platinum Bank,” said Polishchuk. He added that Platinum Bank officials Ihor Doroshenko, Borys Kaufman and Dmitriy Zinkov should answer for the scandal.
“They are the concrete acquirers of this bank,” Polishchuk said. He added that the agreement to sell his share in Mikhailovsky to Platinum was concluded in April and not days before the sale actually took place, in May.
A lawyer for Doroshenko, who remains in pretrial detention, declined to comment. Kaufman, an Odesa businessman, told Forbes-Ukraine that he had no relationship with Mikhailivsky Bank.
“You need to go to Platinum Bank” and ask their owners, Polishchuk told the Kyiv Post.
Platinum did not reply to requests for comment. An October media blitz turned the focus of the Mikhailivsky scandal away from Polishchuk and onto Platinum. Financial journalist Oleksandr Dubinsky claimed that Platinum Bank’s management bought Mikhailivsky, but that they decided to bankrupt the bank and “steal the loans” instead of finishing the buyout.
Platinum also comes with high-level links. NBU Deputy Governor Kateryna Rozhkova left the bank to work at the NBU. The bank’s board included ICU Chief Makar Paseniuk from November 2013 until December 2014.
Corrections: The story has been updated to reflect that Makar Paseniuk left Platinum Bank in December 2014, and to add a statement from ICU. Oschadbank, which failed to reply to a request for comment before publication, contacted the Kyiv Post on Nov. 9 with a statement denying that it gave Viktor Polishchuk a $90 million loan in 2015. The bank argues instead that it gave the mortgage in 2011. “We would like to emphasize, that over the period 2015-2016 Oschadbank did not provide financing under real estate transactions,” said a bank spokeswoman.
