Dubinsky warns about Citibank’s scams, whose foreign currency transactions were blocked by Turkey, back in November 2019

Recently Turkey has blocked foreign currency transactions, which Ukraine encourages, for three large international banks:

  • US-based Citigroup Inc.;
  • French BNP Paribas SA;
  • Swiss UBS Group AG.

Turkey has taken this step to protect its national currency – the aforementioned financial institutions were accused of attacking lira which resulted in the plunge in its value to an all-time low (to 7.2692 per US dollar).

Meanwhile, the National Bank of Ukraine has very warm relationships with the specified foreign institutions, having fully opened our currency market for them.

Citigroup, represented by Citibank in Ukraine, however, holds a special spot in this story. Back in March 2020, the bank began to actively buy up dollars amid the pandemic and decline in the global markets.

Back in November 2019, a member of parliament Aleksandr Dubinsky released the names of the key foreign buyers of the Ukrainian government bonds.

Back then he stated that the holders of the government bonds were ready to pay extra to the foreign depositaries to hold the government bonds outside of Ukraine, to avoid anybody in our country knowing the names of the ultimate beneficial owners of the securities:

“It is very expensive to keep government bonds abroad. For your better understanding: if you keep our government bonds at 16% annual yield in Ukraine, it will cost up to 1% of the yield, while abroad – 4-5%. And somebody is ready to pay the high price just to keep everybody in Ukraine from finding out who the owners of the securities are.”

Why do they need it?

German Clearstream is the main foreign depository, where the Ukrainian government bonds are held. In 2019, the total of UAH 52 billion worth of government bonds of the Finance Ministry of Ukraine was held there.

The key buyers of the portfolio formed at Clearstream included:

  • 75% of the government bonds were purchased by Citigroup (London);
  • 10% — ICBC Standard Bank;
  • 7,5% — Goldman Sachs;
  • 4,2% — Merrill Lynch;
  • 2,6% — JPMorgan Chase;
  • the rest — other non-resident financial institutions.

“That’s the brokers that received instructions to acquire the bonds and transfer them to the accounts specifically at Clearstream, a foreign depository, not at the Ukrainian Citibank or ING Bank. Why? So that nobody could learn who the ultimate holders of the securities are, for example, during an investigation into a criminal case,” Aleksandr Dubinsky states.

The financial pyramid scheme involving government bonds began to actively unfold in Ukraine in 2019.

Citigroup, which has its own Citibank in Ukraine, is transferring securities to the foreign depository Clearstream. In the meantime, the servers of Citibank (Ukraine) are also located there. In this way, nobody controls the owner, and identification and verification are fully non-existent. The National Bank does not know who the ultimate holder of the government bonds is, and cannot obtain this information, as it has no authority for this kind of action.

The management of the National Bank, which abuses government bonds and is forming a financial pyramid scheme, is totally fine with the way things are. Now there is a real threat of economic collapse with very severe consequences: the government will start paying off the national debt of Ukraine using land plots on a massive scale, as the law on the land market has already been adopted.

Andrey Pshenichniy for dubinsky.pro


alex's picture
Sergey Pyvovarov

Related Materials