March 21, 2017, 11:34 pm / Finance

Ex-deputy chairman of the Central Bank Mikhail Sukhov left the regulator, but remained at the DIA

He will retain his place on the agency’s board of directors until the adoption of the law on bank reorganization Tatyana Lomskaya

Mikhail Sukhov, who left the Central Bank six months ago, still remains a member of the board of directors of DIA / Maxim Stulov / Vedomosti

As Vedomosti found out, the former deputy chairman of the Central Bank, the current deputy chairman of the board of VTB, Mikhail Sukhov, is still on the board of directors of the Deposit Insurance Agency (DIA). On Monday, the VTB Supervisory Board approved the combination of two positions - in the bank itself and in the DIA.

Sukhov has been deputy chairman of the Central Bank since 2012 and oversaw the supervision of systemically important banks, licensing and financial recovery. At the same time, he was a member of the board of directors of the DIA as one of the representatives of the Bank of Russia. In October last year, Sukhov left the Central Bank and soon disappeared from the list of members of the board of directors of the state corporation; he is not listed on the agency’s website even now. After approval by the National Financial Council, Sukhov went to work at VTB.

However, formally Sukhov continues to represent the Central Bank on the board of directors of the DIA, although he already works in a commercial bank. The conflict of interest that arose in connection with Sukhov’s transition to VTB has been resolved, says Deputy Minister of Finance Alexey Moiseev (who is a member of the board of directors). Sukhov actually does not participate in meetings of the board of directors of the DIA, he continues, the Central Bank will be able to remove him from the board as soon as it is revised. Now it is inappropriate to change the board of directors, he explains: its composition should be radically updated in three months, when the law on bank reorganization is adopted and the DIA comes under the control of the Central Bank. For now, the board of directors of DIA will work in its current composition with the exception of Mr. Sukhov, Moiseev concludes, adding that his duties on the strategy, personnel and remuneration committee are performed by Sergei Ignatiev.

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VTB has been rehabilitating the Bank of Moscow since 2012; the bank’s financial recovery has become the most expensive in the history of the Russian banking sector - the state bank received 295 billion rubles to save it.

A VTB representative confirms: Sukhov has never participated in meetings of the DIA board of directors since his transition to VTB. Sukhov notified the VTB board of directors about the current situation, the bank did not see a conflict of interest, he concludes. Sukhov himself told Vedomosti that indeed, after his dismissal from the Central Bank, he does not participate in meetings of the board of directors of the state corporation. Sukhov does not attend meetings precisely in order to eliminate a conflict of interest, as follows from the response of the Central Bank representative. He says that the Central Bank is systematically changing its representatives on the agency’s board and will complete this procedure in the near future.

If a systemic conflict of interest arises, a member of the board of directors may abstain from voting, but this cannot be a long-term solution, notes Deloitte director Oleg Shvyrkov. The personal composition of the board is determined by the government and the Central Bank within the framework of their quotas, but the appointment procedure itself can be regulated either by an internal document of the DIA, or determined by the government and the Central Bank directly, he says: “The procedure for changing the composition of the board of directors of the DIA is not prescribed either in the law on insurance of deposits of individuals, Neither the law on state corporations nor the term of office of directors is specified there. It is possible that one member of the council may simply be replaced by a decision of the department that appointed him.”

According to the law on insurance of deposits of individuals, the board of directors of the DIA includes seven representatives from the government and five from the Central Bank, the latter including Sukhov, reminds managing partner of the NSP law firm Alexander Nektorov. He says that when approving its representatives to the council, the government issues an order specifying all members of the council. This means that with Sukhov’s departure, the order must be adjusted, he argues: “Apparently, until this is done, the Central Bank cannot formally recall its participant.”

Last year, the Central Bank decided to radically change the mechanism for reorganizing banks, including gaining full control over this process. The regulator has prepared a bill on the banking sector consolidation fund, which will henceforth deal with rehabilitation, and the Central Bank also prescribed the transfer of the DIA under the control of the Bank of Russia. According to the project, seven out of 13 members of the agency’s board of directors will be appointed by the regulator, five by the government. Thus, the regulator will receive a majority on the DIA board of directors.

A DIA representative did not respond to Vedomosti’s request yesterday. The press service of the Ministry of Economic Development (a representative of the department is also on the board of directors of the DIA) forwarded the request to the Central Bank.