Law enforcement continue investigating potential schemes with a $10 million Ukreximbank loan that agricultural mogul Mykhaylo Stadnyk has never repaid

Law enforcement continue investigating potential schemes with a $10 million Ukreximbank loan that agricultural mogul Mykhaylo Stadnyk has never repaid

It was more than six months ago that the Pecherskyi District Court of Kyiv granted an investigator temporary access to certain things and documents in case No. 42014240000000115, dated 22 October 2014, regarding driving into bankruptcy the Mykhaylo Stadnyk-founded STIOMI-HOLDING LLC. Having sold his business, he went to Switzerland in 2013, together with Ms Kvashyna who reportedly worked at STIOMI-HOLDING LLC. According to media reports, they rest in Italy and visit Germany and Israel, ‘having left their debts and problems in Ukraine’, and having probably obtained citizenship of one of those countries.

The investigation is underway. The case has been going on for more than six years, and those guilty are still to be punished.

STIOMI-HOLDING borrowed a multi-million loan from Ukreximbank that has never been repaid.

It is a reminder that the criminal case was launched into (a) misappropriation, embezzlement or taking possession of an especially large amount of property through abuse of office, (b) driving into bankruptcy, (c) negligence of office that caused grave consequences, and (d) illegal acts in respect of certain property attached, pledged or distrained or to be seized, in the light of potential criminal offences as provided in Articles 191(5), 219, 367(2) and 388(1) of the Ukrainian Criminal Code.

The pre-trial investigation has found that STIOMI-HOLDING’s founder M.V. Stadnyk, jointly with a former STIOMI-HOLDING Director, STIOMI-HOLDING Chief Accountant and some others, fraudulently took possession of the company’s funds of approximately UAH274,000,000 in loan proceeds from Ukreximbank in 2011-2012.

Failure to check into the availability of STIOMI-HOLDING’s pledged property resulted in the amount outstanding under the executed loan agreements becoming overdue and made the bank unable to have its claims satisfied from the pledged property due to its amount in excess of UAH1,039,000 having been embezzled and misappropriated by the limited liability company.

STIOMI-HOLDING LLC is currently declared bankrupt.

The pre-trial investigation’s current findings are that M.V. Stadnyk, using the companies under his control (STIOMI-HOLDING LLC, Khmelnytskkhliboprodukt LLC, Khmelnytskyi Bread Factory LLC, and others) carried out certain transactions in agricultural products that were treated for customs purposes as exports. STIOMI-HOLDING’s suppliers that were involved in the money laundering scheme may include BIC INTERNATIONAL LIMITED (owned by Ms Kvashyna, according to some powers of attorney available in the court case papers), PERRYVALE ENTERPRISES INCORPORATED (525324), and AGRO PLA SRL.

The non-resident companies (that were, in fact, under control of Mr Stadnyk and Ms Kvashyna and received the products from STIOMI-HOLDING LLC, Khmelnytskkhliboprodukt LLC, and Khmelnytskyi Bread Factory LLC) made no subsequent payments for such products, which, in fact, shows that the foreign currency proceeds were not returned.

The scheme, as it appears from the case papers, was banal and primitive — they siphoned the pledged assets off and sold the grain to their own foreign companies for no consideration. What is more, Mr Stadnyk managed to have the company give financial aid to himself shortly before the bankruptcy, which he has never refunded. Both the intent and the secondary liability are obvious.

Reporters and market players are interested in the question, ‘Will Ukreximbank’s new management be able to insist on the extradition and the return of the stolen money?’ An extradition from Switzerland (where Mr Stadnyk and Ms Kvashyna are hiding) did, after all, help to deal with agricultural mogul and former Mriia Group shareholder — Mr Huta. Or has scamming a state-run bank in exchange for a potential kickback to bankers become a norm of life in Ukraine nowadays?