Governor of the National Bank of Ukraine (NBU) Valeria Gontareva has denied her involvement in fund transfers by former authorities.
"Some politicians are accusing me of helping to transfer funds by 'criminal authorities.' I think these accusations are nonsense. The funds were not transferred abroad, but were invested in domestic state debt. This is a direct loan to the national budget that the state doesn't have to return if the law on special confiscation is passed," Gontareva said in a statement posted on the regulator's website.
The NBU and personally Gontareva back the law on special confiscation or any other legal way to return funds to the country's budget.
"This position is open and known to everyone. Some politicians are trying to manipulate facts and accuse the NBU of delaying the process. The NBU believes that these allegations are manipulative and groundless. It is obvious lawmakers should pass the law on special confiscation that would help to return the funds to the budget. The NBU has done whatever possible to arrest these funds in June 2014. The regulator is looking forward to the adoption of the bill by deputies and replenishment of the national budget," Gontareva said.
According to the statement, ICU has been leader on the government domestic bond market both in brokerage services and state-issued securities trading services for over eight years, and investors or banks that required consultations in the deals with debt securities mainly addressed ICU for the services.
In October 2013 the new version of the law on the Ukrainian depository system was issued. It obliges market players to register all deals to sell and purchase government domestic loan bonds via licensed brokers. The document also changed the payment rules for transactions with securities – only via the Clearing Center.
When state-run Oschadbank needed to attract a licensed broker to sign deals on the secondary market between nonresidents and the bank, they applied to ICU. Before the new version of the law, there was no need to do this for Oschadbank. It was a servicing bank. It deposited government domestic loan bonds and it was a primary dealer for nonresidents and bought government bonds from the Finance Ministry of Ukraine under orders of nonresidents without anyone's help in 2012-2013.
Oschadbank confirmed the arrival of funds and financial monitoring of nonresident companies, and ICU had no suspicions about these companies, as all documents and account statements at the state-run bank met Ukrainian law. All payments on transactions with government domestic loan bonds were carried out at Oschadbank. The bank acted as seller of the bonds to nonresidents.
According to the statement, in the middle of 2014 information that these nonresident companies could belong to 'criminal authorities' appeared and the NBU started actively helping to arrest their accounts. In June 2014, Kyiv's Pechersky district court arrested the accounts of these companies.
"Now the securities and money on the accounts of nonresident companies at Oschadbank are arrested and are waiting for the decision of Ukraine's Verkhovna Rada on special confiscation. As of late September 2016, $645.4 million and UAH 1.8 million were on the arrested accounts. The total nominal value of government domestic loan bonds acquired in favor of this group of companies is $981 million," Gontareva said.
The press service of the NBU told Interfax-Ukraine that $645.5 million are arrested funds, including around $500 million is payment on the principal of the loan and the rest is payment of the coupons.
In addition, there are unpaid securities worth $649 million with a coupon income of at least $200 million.
Gontareva said that her practical operations at ICU were mainly aimed at asset management.
"I had no relation to broker operations, and all professional market player know this well," she added.
