The Supreme Administrative Court of Ukraine satisfied the cassation appeal of Yernamio Consulting LTD demanding revocation of the Deposit Guarantee Fund’s decision to wind up Bank Forum.
The court passed the respective judgment on Thursday, 22 January.
Having taken note of all the arguments presented by Yernamio Consulting, the court satisfied the company’s demands as regards revocation of the decision made by the Deposit Guarantee Fund’s executive directorate on approval of the plan for withdrawal of Bank Forum from the market, annulment of its banking license and its further liquidation.
The court ruled that the decision of the Deposit Guarantee Fund on the bank’s winding-up was made in contravention of the law and thus was unlawful.
Smart-Holding continues to fight for the bank and defend the depositors’ rights, although Bank Forum was withdrawn from the market without any reasonable cause and the liquidation procedure commenced without even considering all the suggested options to save the bank.
The problems of Bank Forum accumulated for years, but became dramatically exacerbated in 2013. The bank’s previous owner, Commerzbank, started misreporting the actual status of the bank’s business in 2012. Official records did not show the actual amount of bad debt and, respectively, the required provisions were not formed to the adequate amount. This information was concealed from the NBU and Smart-Holding at the time of the bank’s sale transaction. Smart-Holding filed a complaint against Commerzbank to the ICC international court.
The Deposit Guarantee Fund decided to introduce temporary administration at Bank Forum on 14 March 2014.
The People’s Deputy of Ukraine Vadim Novinsky made an announcement for the bank’s depositors saying that he was ready to continue his efforts to save the bank and that he was going to transfer USD 60 million to the NBU for that purpose, in addition to the previously paid USD 50 million.
‘If the court listens to our arguments, we can backtrack on the situation and hold the investor tender in a transparent and efficient manner. All our proposals, including for the restructuring of deposits, still stand,’ said Mr. Novinsky.
He also reminded that the intention to resume the bank’s operations was recorded in a joint protocol signed between the Deposit Guarantee Fund, NBU and Smart-Holding. Smart-Holding has fully complied with its provisions.
On 27 May 2014, the Fund’s directorate made a final decision to reject the application from private investor Yernamio Consulting LTD for acquisition of Bank Forum and to commence the bank’s winding-up procedure by selling its assets and liabilities. On 26 June 2014, the District Administrative Court of Kiev declared this decision illegal. The Court of appeal upheld the Fund’s previous decision.
Bank Forum was founded in 1994. As of 1 January 2014, Smart-Holding owned 98.6764% of the bank’s authorized capital through Yernamio Consulting. According to the NBU, as of 1 January 2014 Bank Forum ranked 24th among 180 Ukrainian banks in terms of its total assets (UAH 10.404 billion).
Additional information: www.smart-holding.com