In the spring of 2025, the National Bank of Ukraine (NBU) inspectors came to “Sense Bank” for an unscheduled inspection. They were supposed to find out how the bank was complying with corporate governance rules. This was the 12th inspection since the beginning of the Great War — for many reasons, the National Bank paid special attention to the “Sense Bank”.
At that moment, the bank was in a “suspended” state. Its branches were working, it was processing payments for customers. After the state carried out the second wave of purges in the online casino market, the “Sense Bank” share in this market fell, but it was gradually regaining its position. However, for more than half a year, the bank’s supervisory board had not had a quorum and could not work fully. As a result, many important processes were frozen in the bank.
We will explain how a systemically important state-owned bank ended up with a non-functioning supervisory board in the next article in the series.
Now letʼs get back to what the NBU inspectors found.
During an interview with the inspector, one of the bankʼs middle managers explained the details of his work and referred to an old decision of the bankʼs board. The manager found a copy of this document. It was marked "C" ("confidential"). The inspectors had never seen such a mark before, and the document itself was not in the bankʼs official register.
This was the first of about a dozen thousand secret protocols discovered by NBU. It turned out that from 2012 to 2022, a secret structure operated in the bank — a secret board, which only partially coincided with the official one, secret committees, secret meetings of these committees, and secret decisions, which were formalized in secret protocols.
When the former owners left the bank, they destroyed the digital database with the protocols, but it was restored.
«Babel'»
The bankʼs top management left Ukraine even before nationalization (and some even before the start of the Great War) because they had Russian citizenship. However, the secret structure penetrated deeper into the bankʼs structure — hundreds of people were involved in it over the years.
The purpose of the secret structure was simple. The ultimate beneficiaries of the bank were Mykhailo Fridman, Petr Aven, German Khan and several others. They used the secret structure to circumvent Ukrainian banking legislation.
The bank did not work in the interests of its creditors and depositors, but enriched the owners of the bank at the expense of everyone else. To do this, the secret structure used a network of shell companies in different jurisdictions. They masked the bank’s dubious operations and “bad” positions on its balance sheet.
NBU says that as it became clear from the secret protocols, after some operations the bank became technically bankrupt. At the same time, the bank showed the regulator exemplary reporting, which was actually falsified.
- The bank was supposed to create reserves for risky loans to companies that chronically defaulted on these loans, but it did not do so. Instead, the bank hid defaults on such loans by means of short-term restructurings (i.e., it gave one deferral after another). If it had instead created reserves, this would have been reflected in the statements as a decrease in the bankʼs capital. With correct calculations, the bankʼs capital would have become negative in some periods.
- When a bank had a problem debt on its balance sheet, the bank would issue a loan to a company associated with it, and the company would buy the problem debt from the bank. In this way, the bank would so-called "take out the trash" from its balance sheet — it would end up on the balance sheet of another company, where it would be easier to hide. This is how, for example, the well-known company "Credit Initiatives" worked — it accumulated problem debts and lived off the bankʼs loan funds.
Some of the transactions that the secret structure agreed upon were similar to a classic “kickback”. To give an example, the scheme worked in the following way:
- the bank would issue a loan to the structure of a large Ukrainian oligarch;
- after some time, it would become clear that the oligarch could not or did not want to repay it in full;
- then the bank would agree to buy back its debt for 50 cents on the dollar (that is, return a half) — in this case, 20 cents went to the bank, and 30 cents — to a company in Cyprus controlled by “Alfa Group”.
But the largest scheme of the beneficiaries was more sophisticated.
They offered a limited circle of wealthy bank clients to save and increase their money using the profitable financial instrument LPN, “similar to a deposit in Alfa-Bank”.
In this way, they collected more than $400 million from large Ukrainian businessmen, i.e., an amount that exceeded the bank’s real capital several times. The peculiarities of this instrument became apparent in February 2022. It turned out that it would not be possible to take these “deposits” back — neither interest nor the principal amount.
In fact, the businessman did not make a deposit in the bank, but bought a security from the Dutch company “E.M.I.S. Finance”. The Dutch company used the collected money to issue a loan to the Cypriot company “ABH Ukraine”, which was a shareholder of the bank. The Cypriot company could then dispose of this money as it pleased.
«Babel'»
Formally, the “E.M.I.S.” security had collateral. But these were not the bankʼs shares or its assets. The collateral was the debt obligation of “ABH Ukraine”, and the debt could not be collected directly, but only through a trust company. Thus, the businessman — in fact — gave his money to the beneficiaries without serious collateral. NBU explains that such a deal was agreed upon by the bankʼs secret structure.
As often happens, the details of the scheme have come to light in court cases involving disgruntled investors. For example, Ukrainian businessman Yuriy Putko said in a lawsuit to the Commercial Court of England and Wales that in 2019, the head of corporate business at the Ukrainian “Alfa-Bank” in the western region Roman Hnidets advised him many times to invest in LPN. In addition, Putko met Mykhailo Fridman at a jazz festival in Lviv, and he told him that it was “like a deposit in ʼAlfa-Bank”.
Why did Ukrainian businessmen buy these securities, investing millions of dollars in them?
In the spring of 2023, when the first news about this scheme hit the press, Forbes magazine took comments from those who bought LPN. Depending on the series, they were promised high returns — on average about 8.5%. A regular foreign currency deposit in a Ukrainian bank would have brought them 1.5-2% at that time.
The co-owner of “Alfa-Group” Mykhailo Fridman at the “Leopolis Jazz Fest” festival, Lviv, 2019.
Where did the beneficiaries of “Alfa Group” get the money to pay such interest? LPN buyers say that the first issues of LPN were sold for $ 100 or 200 000. Later, issues worth € 1 000 or $ 10 000 appeared. The placement terms were relatively short — from a year to a year and a half. Perhaps the group took money from the income of its Ukrainian companies. It can also be assumed that LPN — in fact — turned into a “Ponzi scheme”: interest on the “early” series of LPN was financed by money received from the sale of the “late” series.
Theoretically, such a scheme could work honestly if the Ukrainian “Alfa-Bank” consistently paid dividends to the Cypriot company. Then the Cypriot company would consistently pay the Dutch company on the loan, and the latter, in turn, would pay high interest to LPN buyers.
Although, from the bankʼs reports it is known that it did not pay dividends to anyone. It could not have done so. In 2014-2016, the bank had losses, and in the profitable years 2017-2021, dividends were prohibited first by the NBU resolution, and then — by law.
The Dutch company “EMIS” stopped paying “coupons” in February 2022 — i.e., since the beginning of the great war, when the EU imposed sanctions against Mykhailo Fridman and Petr Aven.
Currently, the principal debt of the Cypriot “ABH Ukraine” for ten outstanding series of LPN is $ 388 million. “EMIS” has restructured eight of the ten series and promises to pay money for them in 2029-2031.
At the same time, “EMIS” filed a claim against Ukraine for $ 527 million in international arbitration. It claims that it was unable to pay because Ukraine first restricted the work of “Sense Bank”, and then nationalized it, and also imposed sanctions against its owners. The arbitration is considering this claim simultaneously with the claim for nationalization.
The LPN scheme was mentioned in the Ukrainian media when the company of businessman Andriy Verevsky filed a lawsuit against “Sense Bank” in a Ukrainian court.
The process began in January 2026. We describe its details based on the decisions of the courts of two instances. At that time, the bank had not yet found itself at the center of a corruption scandal. There was still half a year left before the publication of the “Mindich recordings”. Although, the bank already had a second supervisory board, and the Cabinet of Ministers began preparing the privatization of the bank.
Verevskyʼs company bought LPN in 2021 (its deal was a bit more complicated than we described above) and demanded money under a buyback agreement that expired in 2022. There were several interesting features in this lawsuit. One concerned the judge, the other the jurisdiction.
The first one is the company went to court several times. It filed a lawsuit, it was distributed by an automatic system, the company did not pay the court fee, the lawsuit was left without consideration, and the company filed it again. This happened several times until the lawsuit reached Judge Svitlana Pohribna. She opened proceedings at the end of April 2026.
The second one is the company filed a lawsuit specifically in a Ukrainian court and named “Sense Bank” among the defendants. It argued that although the bank formally did not sell anything to it (an offshore company did), it helped to formalize the deal and was therefore part of a “single agreement”.
After Iryna Mudra began supervising the bank, Svitlana Pohribna recused herself. The case went to another judge, who decided that it should be considered by an English court or the London Court of International Arbitration, as [it was] stipulated in the agreement.
As NBU explains, it has no evidence that the shadow structure continued to influence the bank after nationalization
However, many bank employees who participated in its work retained their positions, and some even received promotions. According to NBU, at the beginning of 2026, 49 people worked at the bank who were either members of secret committees or reported to these committees. Their reports were preserved in confidential protocols.
NBU could not dismiss them, because this is the authority of the bank’s supervisory board (and its members). So, at the end of July 2026, the contracts of two members of the supervisory board expired. It again lost its quorum, and with it the ability to make decisions.
After that, in August, a corruption scandal erupted, during which it turned out that the chairman of the board Mykola Hladyshenko was communicating with the deputy chairman of the Presidentʼs Office Iryna Mudra.
As a result, its chairman Mykola Hladyshenko was dismissed from the supervisory board “for loss of independence”. The chairman of the board Oleksiy Stupak was also dismissed from the bank.
Oleksiy Stupak has worked at the bank since 2019. His name was also listed among the bankʼs employees who participated in the work of the secret management structure. He was appointed Chairman of the Board by the bankʼs first Supervisory Board in December 2023.
We will tell you how this happened in the next article of our series.