An administrative appeals court in Kyiv has upheld a decision by the National Bank of Ukraine to declare coal tycoon Vitaliy Kropachov's business reputation non-impeccable over his ties to the Russian Federation.
The First Appellate Administrative Court issued the ruling on August 13, confirming that the central bank acted within its authority when it flagged the businessman, who holds a significant stake in financial company Finuniversal.
The press service of the National Bank of Ukraine announced the court decision. The central bank had previously stated in 2024 that Kropachov possesses Russian citizenship, a finding that triggered regulatory sanctions against his financial holdings.
Kropachov has categorically denied the claims. In a comment provided to news outlet LIGA.net through his press service on December 20, 2024, the businessman said the mere thought of holding Russian citizenship outraged him and that he considered the allegation an outright provocation by pro-government structures to exert pressure on business.
Evidence of Russian Citizenship
Judges in both the first instance court and the appellate court concluded that the central bank's regulatory framework, specifically NBU Regulation No. 199, is mandatory. Under the rule, if any indication of citizenship in an aggressor state is identified, the National Bank is required to classify the individual's business reputation as non-impeccable.
The appellate court accepted a letter from the Security Service of Ukraine as valid and sufficient proof. The document provided counterintelligence information showing that Kropachov holds a Russian passport and an individual tax number.
The court explained that official verification cannot be obtained directly from Russia due to the ongoing war between the two nations. Consequently, counterintelligence findings provided by Ukraine's security service carry a high degree of persuasiveness in judicial proceedings.
Magistrates also rejected Kropachov's argument that he is exclusively a citizen of Ukraine because he holds a Ukrainian passport. The court ruled that possessing Ukrainian identification does not disprove the acquisition of foreign citizenship. It added that holding a Russian passport is sufficient on its own to invalidate a business reputation, regardless of whether a formal procedure to relinquish Ukrainian citizenship was ever completed.
Regulatory Impact and Legal Troubles
The judicial decision reinforces enforcement actions already taken by Ukrainian regulators. In early 2025, the National Bank of Ukraine revoked the operating license of Kropachov's firm, Finuniversal, citing his compromised business reputation.
As Ukraine's central bank and primary financial authority, the National Bank regulates non-bank financial companies and enforces strict compliance standards regarding individuals connected to the Russian Federation.
The regulatory ruling follows separate criminal proceedings against the businessman. In May 2024, law enforcement officers from the State Bureau of Investigation detained Kropachov on suspicion of intentionally driving the state-owned Krasnolymanska Coal Company into bankruptcy.
The State Bureau of Investigation serves as Ukraine's primary law enforcement agency for investigating high-level corporate crimes and public corruption. Krasnolymanska Coal Company is a major state-owned coal mining enterprise operating key extraction facilities in the country.
