D. Sennychenko illegally approved the auction protocol for the Dnipro Hotel. It seems that the NBU is also in the «scheme»

By his unlawful actions, D. Sennychenko is trying to conceal the valid ultimate owner of the Dnipro  Hotel and the sources of funds for its purchase, which may lead to the legalization of funds obtained by  criminal means, obtained without paying taxes or received from the aggressor country.

Following the requirements of the Law, before approving the protocol, the SPFU must verify the  application, information and documents attached to it provided by the winner, and if the winner has not  submitted documents or information required by this Law, the SPFU is obliged not to approve the  electronic bidding protocol (part 9 of Article 14 of the Law of Ukraine «On Privatisation of State and Communal Property»).

The winner was SMARTLAND LLC, and as it turned out from the submitted reports, the company is a  micro-enterprise. With a net income for 2019 of UAH 8,197 thousand, a net profit of UAH 667 thousand  and a book value of assets of UAH 5,553 thousand, it becomes clear that the company was not able to  pay the guarantee fee of UAH 8,092,340.00 at its own expense, pay the closed price offer for UAH 711 million 111 thousand 111 and pay the final offer of UAH 1 111 111 222, 22, so it was supposed to use  borrowed funds, i.e., purchase with borrowed funds, by Article 23 of the Law of Ukraine «On  Privatisation of State and Communal Property» (from now on – the Law). BUT the SPFU could not  understand this.

On 26.08.2020, JSC «RVS BANK» published a notice of the general meeting on 10.09.2020,  in which the 3rd issue of the agenda and the draft decision is to give  consent to the opening of a  revolving credit line to SMARTLAND LLC and to obtaincollateral in the form of property rights to the  funds of the property guarantor GAZ COM TRADE LLC (code 41931047).

On 25.08.2020, JSC BANK SICH announced the decision to grant a loan in the form of a non-revolving  credit line secured by property rights under the Bank Deposit Agreement of UAH 1,050,000 thousand  for ten years, with an interest rate of 9.00% per annum.

On 26.08.2020, JSC BANK SICH published the announcement of the general meeting on 16.09.2020, in  which the 4th item on the agenda and the draft decision is to approve significant transactions, namely  the loan agreement dated 26.08.2020 with SMARTLAND LLC.

Thus, the information mentioned above of JSC «RVS BANK» and JSC «BANK SICH» confirmed the attraction of borrowed funds by SMARTLAND LLC to acquire the  privatization object, which was published on 25 and 26 August 2020. According to the bank statements  of the SPFU, SMARTLAND LLC paid for the shares on 10, 11 and 14 September 2020 from the account  opened with JSC BANK SICH.

According to the NBU, JSC RVS BANK and JSC BANK SICH received almost UAH 600 million in  refinancing loans in August-September 2020. This raises the question of using NBU funds and the  NBU’s involvement in using a "shell corp scheme" to acquire the Dnipro Hotel with an  unknown ultimate owner. Despite numerous appeals to the NBU to verify the issuance of a  «fictitious» loan to SMARTLAND LLC and to monitor the deposit from GAZ COM TRADE  LLC, the NBU has remained silent. So maybe public funds from the NBU were used to purchase the  hotel?

THE FACT OF THE EXISTENCE OF CREDITORS HAS BEEN ESTABLISHED!!!

These facts are evidence of the illegal actions of the Head of the SPFU, who, contrary to the requirements  of Part 9 of Article 14 of the Law, approved the auction protocol on 29.07.2020 in the  absence of documents on the creditor and without verifying the creditor by Article 8 of the Law. I remind  you that the winner was obliged to submit the creditor’s documents with its application for  participation in the auction. According to Article 14(10) of the Law, «Upon completion of the  electronic auction, the organizer of the auction for the sale of a small privatization object shall verify the  application for participation in the  privatization of the small privatization object together with the documents and information of the auction winner attached to it and, in case of discrepancies between the documents attached to the application, shall decide according to part nine of this article».

According to clause 68 of the Procedure, «Within the period established for the publication of the  protocol on the results of the electronic auction, the privatization body shall check the application for  participation in the electronic auction submitted by filling in the electronic form and electronic copies of  the documents of the winner of the electronic auction for compliance with the requirements of the  Law». In other words, the law does not provide for the receipt of additional documents from the  winner after the auction, but only electronic copies of the documents submitted by the winner before the auction are checked. The requirement to provide documents on the creditor and to obtain the creditor’s approval is stipulated  in part 13 of Article 14 of the Law» – in case of acquisition of the privatization object   with the funds raised, the buyer must also provide information on the relevant creditor, as well as  documentary evidence that such creditor is willing to consider providing the appropriate amount of  financing if such a participant is selected as the winner of the auction. Please note that the Law states  that it is willing to consider if such a bidder is selected as the auction winner.

Also, part 1. Article 23 of  the Law states that «The property to be privatized may be acquired at the expense of the  buyers» own and borrowed funds and part 4 of this article states that. In case of  acquisition of the privatization object at the expense of borrowed funds, the buyer must also submit  information about the relevant creditor, as well as documentary evidence that such creditor agrees to  provide the appropriate amount of financing if such a participant is  selected as the winner of the  auction." In other words, confirmation that the lender agrees to  provide financing if the bidder is selected as the winner, but not after the selection.

In the SPFU’s letters dated 22.09.20202 No. 10-21-18943 and 09.10.2020 No. 10-21- 20663, D. Sennychenko and T. Yeleyko noted that the auction protocol was approved on 29.07.2020 by Order No.  1268 after verification of the documents submitted by the auction winner together with the application  on the PROZORO website. However, there were no documents on the creditors or documentary evidence  of the creditor’s intention to provide financing, as required by Part 13 of Article 14 and  Part 4 of Article 23 of the Law.

The content of the letter of the SPFU Economic Security Department dated 28.07.2020 No. 23-1-218  indicates that only the documents of SMARTLAND LLC were checked. I draw attention to the fact that  the SPFU, in its appeals to the SSU, the SIS, the STSU and the SFSU, requested to check only  SMARTLAND LLC. In their responses, the STSU and the SFSU did not provide any information  regarding the inspection of SMARTLAND LLC, and the SIU noted that there were no facts of non-compliance of SMARTLAND LLC.

In its letter, registered with the SPFU on 30.07.2020 under No. 12/15133, the SSU noted an increase in  the authorized capital from UAH 10 thousand to UAH 11.3 million in the absence of information about  the real sources of this capital and provided a warning that violations under Art. 8 of the Law could be  avoided if appropriate financial monitoring measures were taken.

In the memo dated 12.08.2020 No. 40-1631 (Minutes approved on 29.07.2020), V. Danylyshyn informs  about the notification from SMARTLAND LLC dated 06.08.2020 No. 37/20 regarding the creditors of  JSCB Industrialbank and JSC MEGABANK. Further, V. Danylyshyn, in his memo dated 14.08.2020 No.  40-1650, informed that the acquisition of the stake was also planned to be carried out at the expense of  funds raised from JSC BANK SICH and requested to inspect JSC BANK SICH by 12:00 on the same day.  By letter dated 14.08.2020 No. 23-233, the Economic Security  Department informed about the  inspection of BANK SICH JSC based on the received responses to the requests.

However, at the request of Kachur D. M. dated 21.09.2020 No. 2 to provide the SPFU’s requests  and answers regarding the inspection of JSC Bank SICH, in a letter dated 28.09.2020 No. 10-23-19195,  the SPFU provided information on the lack of documents for the Fund to verify the creditor JSC Bank SICH.

The SPFU has no documents to verify the creditor.

BUT the SPFU made a decision on 29.07.2020 to approve the said protocol in the absence of documents  regarding the buyer’s creditors and in the absence of the creditor’s consent to provide the  appropriate amount of financing, the mandatory submission of which is provided for by this Law, and  did not verify the creditor for compliance with the requirements of Art. 8 of the Law and, as it seems, has  not verified the creditor at this time and does not have documents for verification. THE  CONCLUSION IS CLEAR AND UNDERSTANDABLE – D. SENNYCHENKO APPROVED THE AUCTION  PROTOCOL IN VIOLATION OF THE LAW

As can be seen from the above, D. Sennichenko is trying to violate the law by: «legalizing» the use of «schemes» in privatization, «legalizing» the use of «shell corp» at the auction on PROZORRO «legalizing» the use of banks as «shell corp» to pay for the privatization object and which have not been verified use the «scheme» to conceal the actual creditor (through a loan guarantee) and to hide the actual owner of the privatization object, which is not verified by the requirements of Article 8 of the
Law «cover» the «scheme» to conceal the actual owner of the privatization object, which is not verified by the requirements of Article 8 of the Law. of the Law; «covers» a «scheme» of using funds of unknown source and unknown origin to purchase a privatization object, which may be related to the legalization of «dirty money» through privatization.

In case of these law violations, there is a threat of using dirty funds, funds obtained
by criminal means, or funds of the aggressor state to acquire the privatization object.

At the same time, there is a threat that a representative of the aggressor country or a criminal business  group may become the ultimate owner of the Dnipro Hotel.

AND ALL THIS IS CALLED TRANSPARENT PRIVATISATION BY D. SENNICHENKO. Mr. President,  you were dragged into all these "schemes" to privatize the Dnipro Hotel by D. Sennichenko. But you are also silent.

It’s time for the President, the Verkhovna Rada and the Cabinet of Ministers to raise the issue of  dismissing from the SPFU leadership these fools and «schemers» who do not understand the  privatization legislation, mislead investors and citizens and brazenly violate the requirements of the law,  which can harm the State and citizens.

INVESTORS, BE CAREFUL WITH PRIVATISATION FROM THE «NEW FACES» OF THE  STATE PROPERTY FUND!!!

There are already many articles about numerous violations during the privatization of the Dnipro Hotel,  they can be found on the pages of the Active Citizens Information Agency and the All-Ukrainian  magazine Corrupt in Ukraine.

Therefore, citizens keep an eye on privatization because it is not only the development of the state and  an increase in investment, but it can also be a source of harm to the state and the interests of citizens.

We need to control the authorities actions, prevent them from violating the law and the rights of  citizens, know and fight for our constitutional rights, for transparent privatization, for budget revenues  and fight against the arbitrariness of officials.

Whether a citizen becomes a source of power depends on each of us. And start small – leave comments, opinions and your impressions of what you have read.

Dmytro Kachur – a member of the Public Council of the SPFU, an expert on privatization, and Chairman  of the Board of the NGO "Officers. Citizens. Free Ukraine»