Ukraine's government has purchased Sense Bank, which is linked to sanctioned Russian oligarchs Mikhail Fridman and Pyotr Aven, for 1 hryvnia (2 U.S. cents) after the central bank (NBU) ruled to remove the institution from the Ukrainian financial sector.
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Lawmaker Yaroslav Zheleznyak said the move on July 21 will put the bank, formerly known as Afla-Bank Ukraine, under the management of the Ukrainian Finance Ministry.
The government move came a day after the NBU said that an interim administration will be set up for Sense Bank once the government approves its nationalization.
The move was taken because of the bank's association with Fridman and Aven, who are connected "with the government of the country-aggressor" and are currently under sanctions in Ukraine, the NBU said.
The government is expected to complete the nationalization of Sense Bank by the end of the weekend.
Last month, a nominal owner of the Sense Bank, Luxemburg-based ABH Holdings S.A., asked Ukraine's National Security and Defense Council to sell the bank to a European investor, promising that the money received from the buyer will not go to either Fridman or Aven.
Skhemy (Schemes), an investigative project run by RFE/RL, has reported that Russian companies linked to Fridman had been involved in supplying Russian troops invading Ukraine with clothes and food, and also provided insurance for technical equipment for the Russian National Guard that is being used in the war in Ukraine.
In September, the Financial Times and The Washington Post cited sources as saying that Fridman had held talks with a U.S. official, offering $1 billion for Ukraine's efforts to restore infrastructure damaged by Russian strikes in exchange for the lifting sanctions imposed on him by the West. Fridman denied the reports at the time.
In May 2022, Ukrainian authorities froze Fridman's assets -- estimated to be $416 million -- that were held by Alfa-Bank Ukraine.
President Volodymyr Zelenskiy subsequently signed a law allowing the nationalization of property and assets of individuals who support Russia's ongoing invasion of Ukraine, launched in February 2022.
Fridman, a 59-year-old Ukrainian-born Russian-Israeli businessman, was the founder of Alfa-Bank and grew to be one of Russia’s wealthiest businessmen. He has been sanctioned by the European Union as part of a series of moves against Russia for its war against Ukraine.
The EU described him as “as a top Russian financier and enabler of [President Vladimir] Putin’s inner circle.”
In 2013, Fridman and the 68-year-old Aven, one of his main Alfa partners, reorganized their holdings following the $14 billion sale of their stake in the Russian oil company TNK-BP.
They created a new London-based investment group called LetterOne, but both men stepped down from the new company after the EU imposed sanctions in March 2022.