Collapse of Tatfondbank: Swindling covered by Tatarstan Government?
Hoodwinked clients of Tatarstan banks demand their money back and suspect that not only was the Prime Minister aware about the embezzlements and upcoming license revocation, but could even cover the swindlers.
The day when the news broke that failed Tatfondbank has lost its license was nicknamed ‘black Friday’ in Kazan. Robert Musin, a Deputy of the State Council of Tatarstan and the Chairman of the Board of Tatfondbank Public Joint Stock Company, was arrested in the Kazan airport. At the late night, it became known that Musin has been charged under part 4 of Article 159 of the Criminal Code of the Russian Federation (swindling committed on an especially large scale) and remanded in custody. Five top managers of the failed bank had been arrested earlier: Timur Valshin, Head of TFB Finance; Vadim Merzlyakov, Deputy Chairman of the Board of Tatfondbank; Ilnar Abdulmanov, Head of the Department of Active Operations; and Rustam Timerbaev, Head of the Department of Client Operations on the Stock Market of Tatfondbank and Head of the Client Services Department of TFB Finance. Sergei Meshanov, ex-Deputy Chairman of the Board of Tatfondbank, was arrested in the Moscow region
Robert Musin, Chairman of the Board of Tatfondbank
Meanwhile, the frustrated business clients of Tatfondbank have delivered an ultimatum to Rustam Minnikhanov, the President of Tatarstan. This past weekend, clients of Tatfondbank, IntekhBank (a member of TFB Group), and Ankor Bank have nearly stormed the Government House in Kazan, broke to Prime Minister Ildar Khalikov, and presented their demands. Concurrently, a sign-in has started at change.org under a petition to dismiss Ildar Khalikov who had chaired the Board of Directors of Tatfondbank. The hoodwinked clients believe that the Prime Minister was aware about the embezzlements and upcoming license revocation, but “due to his incompetence”, hadn’t interfered into the situation and could even cover the swindlers.
Tatfondbank controlled by the Republican Government has been experiencing issues since the end of the last year. On December 14, 2016, the organization suspended the client services, and the Central Bank of the Russian Federation has imposed a three-month moratorium on satisfaction of customer claims. The Deposit Insurance Agency has been appointed the interim administration. Later IntekhBank has also been taken into interim administration. Insurance settlement payments to the clients have started.
Then it became known that shortly prior to the troubles, funds of many Tatfondbank clients had been kept not on bank deposits – but on accounts of TFB Finance investment company incorporated as a limited liability company. It had been offering higher interest on deposits than Tatfondbank, thus, attracting people. According to the bank clients, Tatfondbank officers had been persuading them to transfer their savings to TFB Finance for trust management misleading the people that their money would be covered by the deposit insurance system. When the bank started collapsing and clients of TFB Finance addressed the deposit insurance system, it turned out that they are not entitled to insurance compensations. The cheated people have addressed the Ministry of Internal Affairs (MIA) for the Republic of Tatarstan; a criminal case has been initiated due to an episode of swindling on an especially large scale. This is how an army of hoodwinked investors have joined the legal entities not covered by the deposit insurance system, whose money had got caught up at the bank.
A few days prior to the revocation of the Tatfondbank’s license, Rustam Minnikhanov, the President of Tatarstan, had announced that the bank – already ‘doomed’, as it turned out later – is to be reorganized by TAIF Group of Companies affiliated with sons of Mintimer Shaimiev, the first President of Tatarstan. But Elvira Nabiullina, Governor of the Central Bank of Russia, has decided otherwise because experts of the Central Bank had identified embezzlements and outright siphoning off of assets in the bank.
“As of February 1, 2017, the ‘hole’ in the Tatfondbank capital was some 96.7 billion rubles. Prior to the imposition of the interim administration, the ‘hole’ was estimated at 43 billion rubles. The interim administration has found that the ‘hole’ was much larger, – Olga Polyakova, Deputy Governor of the Central Bank of Russia, has advised. – According to calculations performed by the Central Bank and Deposit Insurance Agency, at least 220–230 billion rubles in borrowed funds would be required to reorganize Tatfondbank”.
Polyakova also said that the problems of Tatfondbank were linked with its business model focused mainly on crediting businesses belonging to Robert Musin, co-owner and former Chairman of the Board of Tatfondbank. Loans to the owner’s businesses had constituted 65% of the bank credit portfolio. “Most borrowers are currently bankrupt,” – the Deputy Governor of the Central Bank has noted.
Experts of the Central Bank believe that there were episodes of direct siphoning off of assets from Tatfondbank; in particular, a number of transactions dated the end of December have worsened the financial standing of the bank. The respective materials have already been submitted to the Prosecutor General’s Office of the Russian Federation.
It became known that in August 2016, Robert Musin has taken a loan in the Central Bank of Russia and provided false information about a readily marketable asset secured by credit agreements with other joint stock companies. Later the borrowed funds in the amount over 3 billion rubles have been transferred to organizations affiliated with Musin. In other words, the Deputy of the State Council of Tatarstan has simply stolen the money. It is necessary to note that the Prosecutor, while insisting on remanding Musin into custody, has noted that the suspect owns real estate abroad.
On the next morning after the arrest of Robert Musin, the desperate clients have gathered near the Tatfondbank Head Office; then the crowd went to the Council of Ministers of the Republic of Tatarstan located on Svobody square and nearly smashed the door while charging through the police cordon.
Video: Tatfondbank and IntekhBank clients storm the Council of Ministers
Prime Minister Ildar Khalikov has met the truce envoys nicely. They delivered to him an ultimatum requiring to return the people’s money and appeal the revocation of the Tatfondbank’s license. The messengers gave three days to the President of the Republic of Tatarstan to fulfill the demands of the bank clients; otherwise they had threatened to stage a ‘Maidan’ to impeach President Rustam Minnikhanov. The clients have provided the story of Atlas Bank as an example to be followed.
Generally speaking, legal disputes with the Central Bank over revoked licenses are a hopeless cause. For example, in May 2014, the Central Bank had revoked the license of Moscow-based Atlas Bank for breaches of the ‘anti-laundering’ legislation. In August 2015, Atlas Bank has gained the right to reinstate its license through appeal and cassation; concurrently, the bank has been liquidated in the framework of a parallel litigation with the Central Bank – i.e. ceased to be a legal entity. In addition, the Central Bank can revoke the reinstated license again due to other reasons.
There is indirect evidence that the bank – and hence the Government of the Republic of Tatarstan – were aware about the upcoming collapse as early as in spring 2016. A few days prior to the imposition of the interim administration, several accounts storing sums exceeding the insured amount have been split. In addition, Tatfondbank has collapsed in December 2016 – while in January 2017, Sergei Meshanov, ex-Deputy Chairman of the Board of Tatfondbank, became a Vice President of the Retail Business Block in Promsvyazbank.
It is necessary to remember that the Government of the Republic of Tatarstan was the principal shareholder of Tatfondbank, while Khalikov was a member of its Board of Shareholders. It appears that the bank top management have either wasted the public funds, or the funds have disappeared with the consent from the Government.
By Monday, the ultimatum has been rejected by the Prime Minister. He said that neither the republican authorities, nor state corporations, nor TAIF would approve such a disbursement of money. It would also be unreasonable to dispute the decision of the Central Bank. Marat Dolgov, Deputy Prosecutor of the Republic of Tatarstan, started openly threatening the cheated clients.
“I would like to warn against illegal actions and negative politicization of the process. I would like to put it straight: all illegal actions, especially public ones, would be treated in a proper legal way. All actions without exceptions,” – Dolgov said.
Video: Ildar Khalikov responds to the ultimatum from cheated TFB clients
Still, the hoodwinked people require some real action from the Republican Government and are ready to impeach Rustam Minnikhanov, the President of Tatarstan.
A CrimeRussia source states that the Prime Minister of Tatarstan won’t be able to escape the liability. An order has been given to identify the entire group of persons involved with the current banking crisis and bring them to justice. The collapse of Tatfondbank and negligent involvement of Ildar Khalikov into this crash put an end to his career as the Prime Minister. In the meantime, the demands of the cheated clients to the bank have already evolved into demands to the republican authorities, which is a serious political challenge for Tatarstan.
After scaring Dagestan with inspections, arrests, and searches, the interdepartmental commission of the Prosecutor General’s Office and ICR has identified key priorities for the regional watchdog authority. After the crackdown on the old clan-based system, the management reforms became more constructive – however, another wave of criminal cases, terminations, and arrests is expected in the republic. The CrimeRussia was figuring out what other Dagestani officials are currently at risk.