AST Agroholding accuses Alliance Bank of fraud: fertilizer loan issued, goods never delivered

26 July 2023 , 01:11

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The agricultural holding and its management have never been linked to Viktor Medvedchuk or Oksana Marchenko, do not know them personally, and have no business or personal ties with them, UNN reports, citing TSN.

AST Agroholding issued a public response to what it described as a media attack that began on July 17, 2023.

In its statement, the company emphasized that, like the entire agricultural sector, AST Agroholding is currently operating in survival mode. Despite these challenges, the company says it remains a responsible business partner and a major taxpayer contributing millions of hryvnias to the state budget. During the full-scale war, AST states that it has preserved jobs, supported local communities, and allocated millions of hryvnias to assist Ukraine’s Armed Forces.

According to the company, these results were achieved through effective operational management. AST noted that all of its managers and owners have remained in Ukraine throughout the war and continue to work, rather than leaving the country. The company argued that allegations linking AST or its management to Viktor Medvedchuk are an attempt to discredit the business by exploiting a highly sensitive issue during wartime. In its public response, which was distributed through multiple media outlets, AST said it had provided evidence refuting all such accusations.

The statement further stressed that neither AST Agroholding nor its management has ever been connected to Viktor Medvedchuk or Oksana Marchenko and that none of the company’s representatives have any personal relationship with them, ruling out both business and personal ties.

AST maintains that the information campaign is one of the tools being used by Alliance Bank in an effort to seize the company’s funds and assets while diverting attention from what AST describes as the bank’s own illegal activities and fraudulent schemes.

The company claims that Alliance Bank, through its counterparty LLC Evoterra Trade and with the involvement of senior bank executives, including Alliance Bank Supervisory Board Chairman Pavlo Shcherban, attempted to take control of AST Agroholding’s funds and assets. According to AST, the case concerns a loan issued by Alliance Bank for the purchase of fertilizers through its counterparty. The company alleges that while the fertilizers were never delivered, the loan repayment obligations remained in force.

Complaints filed with law enforcement authorities regarding the fraudulent actions of Alliance Bank representatives resulted in the registration of criminal proceedings in the Unified Register of Pre-Trial Investigations. The investigation, registered under case No. 12022111380000371 on July 28, 2022, under Part 3 of Article 190 of Ukraine’s Criminal Code (fraud), has not yet produced a final outcome.

AST also criticized Alliance Bank’s management, claiming that during a period when Ukrainian businesses are operating under extraordinary conditions and require constant oversight, the bank’s senior executives abandoned their responsibilities. The company alleges that Alliance Bank owner Oleksandr Sosis, Supervisory Board Chairman Pavlo Shcherban, and CEO Yuliia Frolova have all been outside Ukraine since the beginning of the full-scale invasion and are not addressing the concerns of the bank’s customers and depositors.

The statement further notes that the situation involving Evoterra Trade’s failure to fulfill fertilizer supply obligations to agricultural enterprises is not unique. According to AST, numerous court cases indicate that other agricultural businesses have faced similar issues.

Alliance Bank has been a party to thousands of court cases in Ukraine and has repeatedly come under scrutiny by the Security Service of Ukraine (SBU), the Prosecutor General’s Office, and NABU over allegations of money laundering and the transfer of funds for the benefit of beneficiaries in Russia. In addition, Ukrenergo, one of the country’s largest state-owned energy companies, has been unable for more than a year to recover a debt of nearly UAH 1.2 billion from Alliance Bank. According to AST Agroholding, these facts indicate that Alliance Bank used fraudulent schemes on a systematic basis over many years as a tool for unlawful enrichment.

The company also points out that Alliance Bank officials have reportedly remained outside Ukraine since the start of the full-scale war, a fact that has been repeatedly highlighted by various online media outlets.

AST Agroholding calls on law enforcement authorities to pay close attention to what it describes as the unlawful activities of Alliance Bank. The company argues that a thorough investigation of such fraudulent schemes and appropriate accountability for those involved would help promote fair business practices in Ukraine during wartime and strengthen investor confidence following Ukraine’s victory.