The Federation has stated that legal procedures in refinancing of the VAB Bank and other cases are taking place in a way that adversely affects the investment situation in the country.
Today the Federation of Employers of Ukraine made the open appeal to the President and the Prime Minister public. In this statement, the federation urges not to destroy the investment situation in the country by high-profile searches and delays in the context of the refinancing of the VAB bank and to consider the possibility of restructuring Oleg Bakhmatyuk's debt in order to save 27,000 jobs and return the debt to the budget.
Open Letter of the Federation of Employers to the President and the Prime Minister
The Federation of Employers of Ukraine (FEU) has been consistently critical of the actions of the National Bank of Ukraine (NBU) run by Valeria Hontareva and the Individual Deposit Insurance Fund (IDIF) led by Kostiantyn Vorushylyn.
The criticism was provoked by the lack of transparency in matters of refinancing of banks, appointment of interim administrators, and liquidation of banks. Other points of contention included a policy that encouraged banks to discontinue the financing of the real sector of the economy and instead engage in speculative trading in the foreign exchange and debt markets. They also instituted nontransparent mechanisms used to sell the assets of banks up for liquidation. In short, their actions not only drove banks to bankruptcy but also caused business entities to incur substantial losses and dealt a detrimental blow to the Ukrainian economy as a whole. In this context, employers support attempts by the law enforcement agencies to investigate such actions of NBU and IDIF leadership.
Meanwhile, the Federation of Employers of Ukraine is extremely concerned over recent events surrounding the activities of the unformed and law enforcement services. In our opinion, they are a publicity stunt for the most part and have little in common with a truly fair and unbiased pretrial investigation of alleged crimes in the field of economics and public finance. A case in point is the search of the premises and arrest of Raiffeisen Bank Aval officers late on the night of November 11, 2019 by operatives of the National Anti-Corruption Bureau of Ukraine. They are now officially suspects.
Meanwhile, the Criminal Procedure Code of Ukraine states that a search must be conducted at a time when it can cause the least impairment to a person’s ordinary activities. Such incidents have been recently on the rise. They are extremely detrimental to the investment climate in Ukraine and cause distrust in the principles of justice, equality, and protection of all citizens proclaimed by the nation’s leadership. As for the accusations levied against VAB Bank executives and owners, the Federation would like to reiterate that over the course of recent years Oleh Bakhmatiuk, owner of the bank and the company Ukrlandfarming, repeatedly offered to arrange payment of UAH 8 billion to the nation’s budget under the restructuring mechanism and put forward such proposals to NBU management.
The Federation of Employers of Ukraine also repeatedly came forward with initiatives to resolve the situation surrounding Ukrlandfarming based on the constructive proposal of VAB Bank owner Oleh Bakhmatiuk. Regrettably, they fell on deaf ears over at the NBU. Bear in mind that Ukrlandfarming is one of the largest employers in the agricultural sector, employing close to 27,000 Ukrainians and keeping them from labor migration abroad by offering decent wages in the countryside. If the government brushes off a constructive dialog with the owner of VAB Bank and Ukrlandfarming, this may harm not only the national budget but also the investment climate in Ukraine as a whole.
The company that has found itself a hostage of circumstance is a major exporter and taxpayer and a vital element of Ukraine’s economic potential. This situation can be channeled into a constructive vein for the sake of job safety, tax revenue, and a favorable investment climate in Ukraine, the more so that the owner of Ukrlandfarming offers to pay UAH 8 billion to the national budget through restructuring. In the opinion of Ukrainian employers, this can be viewed not only as a goodwill gesture but also as a sign of accountability and a desire to resolve the situation constructively in the best interests of both the company and the state.
We appeal to you to take a statesmanlike position because – depending on the way you choose to go – the resolution of this situation can have either extremely negative or very positive consequences for country’s economy and society alike. A dialog between the government and the business community in the best interests of the nation is always a better option than “warfare”, since even after the war has been waged and losses suffered there always comes a time for negotiations.