Borsky Commercial Bank going belly-up enriches owner
Banker Nikolay Khvatkov is being accused of deliberate bankruptcy and abuse of power.
The Investigative Department of the Nizhny Novgorod Investigative Committee has completed an investigation into the case of Nikolay Khvatkov, the chairman and principal owner of Borsky Commercial Bank (BKB). He was charged under articles on Deliberate Bankruptcy of a credit institution (Article 196 of the Criminal Code) and Abuse of Authority (part 2 of Art. 201 of the Criminal Code). According to the investigation, on the cusp of the bankruptcy of the credit institution, which occurred in 2011, it was him who became responsible for issuing suspicious loans to entities controlled by him, which in fact did not conduct any business. This is reported by Kommersant.
In 2015 Khvatkov's deputy Lyudmila Krivenchuk has already received a three-year suspended sentence for the withdrawal of 133 million rubles ($2.3m) from the bank. The prosecution managed to prove that in 2010 she issued loans to four shell firms. The accused herself stated that she acted on the order of her boss Nikolay Khvatkov and was not aware of the insolvency of these firms.
At the same time the investigation into Khvatkov himself did not establish the fact of appropriation of the bank's funds. The organizations that were granted loans with his permission had been previously serviced in BKB and had always repaid borrowed funds. However, all of them (7 firms in total) were somehow connected with the son of the defendant. Therefore, he was charged with the fact that he had issued loans to affiliated companies without collateral, which ultimately led to the collapse of the bank. This was confirmed by the episode with the issuance of 42 million rubles ($733.6 thousand) to the son's company for the construction of a house, which in fact was already put in order. In total, the investigation estimates the damage caused to the depositors of the bank at 280 million rubles ($4.8m).
In autumn 2010 the Central Bank revoked the license from BKB, when its capitalization fell below 2%. According to the regulator, this was triggered by a risky credit policy and neglect of reserves for possible losses. The Deposit Insurance Agency, under whose control the bank was transferred, was forced to pay over 580 million rubles ($10.1 m) in compensation to the investors. The assets of the bank itself could not cover half of the claims of creditors, the total amount of which hit almost 1 billion rubles ($17.4m). Having unleashed the signs of embezzlement, the Deposit Insurance Agency appealed to the law enforcers.
It is interesting that at the time of the bankruptcy of the bank, Nikolay Khvatkov himself was a deputy of the Borsk City Council and even ran for the regional Legislative Assembly from the Communist Party.