Ukraine probes bank bosses over theft

Ukraine probes bank bosses over suspected theft

Ukraine's interior ministry has launched an investigation into senior figures at the country's national bank over the suspected theft of millions of pounds earmarked to shore up the country's creaking economy.

By Matthew Day in Warsaw
Telegraph, 11 Sep 2009

Yulia Tymoshenko, the prime minister, is in a bitter feud with the president Photo: AFP/GETTY

Yuriy Lutsenko, Kiev's interior minister, said that the investigation was looking for information into "who is responsible for the absence of control over a colossal financial fraud, in which hundreds of millions were plundered in broad daylight".

He added: "The documents that are currently available to us and the reports we've recently received indicate that National Bank officials could be prosecuted."

Anatoliy Shapovalov, the national bank's deputy chairman, has already been summoned to face questioning over his role into the alleged fraud.

The news of the investigation will place a further cloud over Ukraine, which has already received about £6 billion from the International Monetary Fund in an effort to keep the country for sliding into economic meltdown.

Mr Lutsenko added that the apparent criminal activity had contributed to the plight of the hryvnia, the country's national currency, which has seen its value crash by 44 per cent since last September as Ukraine struggles to cope with the global recession.

Investigators believe that senior figures at the bank used the emergency funding to speculate on the currency markets, contributing to the hryvnia's decline.

But some in Ukraine see the probe as only another round in a bitter and polarising political fight between Yulia Tymoshenko, the prime minister, and President Viktor Yushchenko, who are set to contest next year's presidential elections.

The prime minister has tried to remove national bank's head, Volodymyr Stelmakh, a Yushchenko loyalist, from his post, blaming him for some of the country's economic woes.

As the controversy gathered pace Oleksandr Savchenko, a member of the bank's board loyal to Mrs Timoshenko, quit. He said there had been political interference by Mr Yushchenko that was damaging the economy.