A story that undermines confidence in the Ukrainian banking system: Who is behind the collapse of Megabank? The bank is still under investigation for the possible embezzlement of about 30 million euros received from the Ministry of Finance and the European Investment Bank (EIB). And, as it turned out, the bank’s co-owner, Viktor Subbotin, his family, and related companies are at the center of this story.
Is money only for small businesses?
Back in 2017, Ukraine launched the international project “Main Loan for Small and Medium Enterprises”. The EIB allocated funds to support businesses, and the Ministry of Finance, through Ukreximbank, directed them to commercial banks. Among those selected was Megabank, which received €30 million between December 2017 and November 2021.
Instead of these funds reaching the entrepreneurs, “their own” intervened – law enforcement officers found that a significant part of the funding went to lending to companies affiliated with Subbotin himself. One of them is the Nonferrous Metal Plant LLC, which received €10 million from the bank directly. This money partially repaid the company’s previous debts to the same bank, and the rest was placed on a deposit, the rights to which were also pledged.
Later, it turned out that ZKM spent the previous tranches of loans to purchase real estate from the bank itself and securities from PJSC ZNKIF Zaoshchannya, an entity controlled, again, by Subbotin. Payments were made through another company close to him, Option-Trade LLC, where his wife, Olena Subotina, is a director and owner of a significant share.
Withdrawal of assets through the family
OPTION-TRADE LLC is a company with more than UAH 51 million in authorised capital, registered in Kharkiv. Its main activity is printing of other products, although the list of services includes financial transactions and real estate leases. The company’s legal address is a non-residential building with an area of almost 5,000 square meters, which is owned by the company, as well as a land plot leased since 2012.
Investigators found that this company was used as one of the key elements of the money laundering scheme. The pre-trial investigation revealed that the company was part of an informal “conversion centre” with an interregional network that includes dozens of companies across Ukraine, some of which are already involved in criminal cases.
Subbotina herself, in addition to OPTION-Trade, heads several companies, including TORI 2014 LLC, TUDU CORPORATION LLC, M-Invest PrJSC, and others that share a legal address with Subbotina’s investment fund. According to the investigation, it was in these premises that searches were conducted in 2023 to seize financial documents that could confirm the withdrawal of funds through affiliated structures.
A scheme that was not noticed?
All the signs of abuse of office were on the surface several years ago. However, the criminal proceeding №42019221430000469, opened in 2019, remained dormant for a long time. Until the beginning of 2022, the case was mostly considered only by lawyers’ complaints. After the investigation was transferred to the SBI, investigators began to actively document and uncover the schemes.
In particular, it turned out that Megabank JSC had been pursuing a risky lending policy for years, providing loans to related and troubled borrowers. Systemic violations in the area of liquidity, artificial debt, misuse of credit funds, and complete dominance of the Subbotin family in financial flows all led to the bank’s downfall.
In February 2022, the National Bank recognised Megabank as problematic, citing systemic lending to related parties as one of the reasons. Subbotin and his team made no attempts to stabilise the situation, and a temporary administration was introduced into the bank.
After losing control of Megabank, Subbotin’s related entities began to “retreat” – in particular, the Nonferrous Metal Plant suddenly found itself in bankruptcy proceedings in December 2022. Investigators consider this bankruptcy to be artificial and view it as part of a general scheme of property diversion.
MP, banker, and honorary citizen
Viktor Subbotin is a very public figure. He is the former CEO of Turboatom (now Ukrainian Energy Machines JSC), a member of the Kharkiv Regional Council from the Servant of the People party, a state award winner, and an honorary citizen of Kharkiv and the region. His portfolio includes participation in elections for the Party of Regions, work on the Supervisory Board of Megabank, and dozens of companies where he is a founder or beneficiary.
His wife, Olena Subbotina, is also actively involved in the business environment – she manages at least seven companies and is, in fact, a key person in some of the business transactions through which funds were withdrawn, according to the investigation. Together with her brother, Oleksiy Yatsenko, former chairman of the board of Megabank, they could have been co-organisers of one of the largest schemes to steal international financing.
Despite all this, as of now, neither Subbotin nor any of his associates have been officially suspected. However, the case is being promoted, and the names are becoming public, which is at least a marker of change.
As a reminder, former Turboatom director Viktor Subbotin withdrew UAH 1.4 billion from the company through his Megabank and is now attempting to appoint his business partner, Mark Becker, to the supervisory board.
