“Shadow” schemes of Veles and a $460 million fraud: Konstantin Bondarev and his shareholder partners forced the NBU to pay for the liquidation of their own scam

The Pechersk District Court in Kyiv has upheld the lawsuit filed by former Veles Bank shareholders — Konstantin Bondarev, Irina Goncharova, and Aleksandr Kandyba — ordering the National Bank of Ukraine to pay 105 million UAH.

The ruling, issued on April 16, states that the plaintiffs consider this sum to be compensation for “property damage” caused by the NBU’s actions, which deprived them of the ability to manage their corporate rights in the bank’s authorized capital following its liquidation.

The former owners of Veles Bank noted that administrative courts had canceled the NBU’s resolution on the liquidation of Veles, while the NBU and the Deposit Guarantee Fund did not take measures to restore the bank’s operations and return its assets.

Taking this into account, the court stated that "as a result of the defendant’s issuance of an illegal decision to revoke the banking license and liquidate JSC ’Veles Bank,’ the plaintiffs were unlawfully and without proper compensation deprived of their private right to corporate rights evidenced by shares of the banking institution."

The National Bank decided to revoke the banking license and liquidate PJSC ’Veles Bank’ in December 2015 for engaging in risky activities and violating legislation in the field of financial monitoring.

The NBU stated that prior to this, the regulator had prevented an attempt to withdraw approximately $460 million abroad using documents with signs of fictitiousness, after which the regulator ordered an inspection of the bank regarding financial monitoring issues.

During the inspection, facts of the bank engaging in risky activities were revealed. The National Bank also identified a number of operations aimed at evading restrictions of currency legislation and financial monitoring requirements.

In addition, according to the NBU, 90% of the bank’s operations were related to capital outflow (including transferring funds abroad), including the use of forged documents. In 2015, their volume exceeded $100 million.