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In an article by The Insider and in an interview between Andrey Zayakin and Alexander Plyushchev, two rather strange and, in my view, completely incorrect narratives appear.

Since they have started to spread, I would like to comment on them here.

The first narrative concerns the diversion of assets from Probusinessbank. It is described as an example of “shifting risks onto shareholders and depositors” — a phenomenon known as “risk shifting”, or “privatizing profits and nationalizing losses.”

However, such a description of what happened is fundamentally wrong.

In this case, there was no “risk shifting” — what we have here is straightforward theft.

The example given in The Insider article illustrates this perfectly. The company Wonderworks, controlled by Leontyev, received $360 million in loans from affiliated parties, including funds siphoned from the bank. At the same time, the company did not report losses — on the contrary, it made $190 million in profit. However, the funds issued as loans never returned to the bank. In effect, the shareholders “privatized” not only the profits but also the original sums. In fact, they privatized everything.

This is not “risk shifting” — this is theft.

Moreover, the schemes were deliberately structured legally to make this theft possible. Formally, the loans were issued to offshore companies with no operational activity, no collateral, and no guarantors, which created no incentives for the recipients to repay the money, and left the bank with no means to recover it. The only possible incentive to return part of the money was in a hypothetical scenario — “issue a subordinated loan to shore up the bank’s capital, attract even more money, and steal even more.”

All three offshore companies had no operational activity and no assets on their balance sheets. They only had accounts from which, in the case of standard loans, all funds could be withdrawn in advance before default with a simple click — to other similar offshore accounts or elsewhere — leaving the creditor bank with nothing.

The situation with the companies “Ambika” and “Merrianol” was even more absurd: if the offshore failed to repay the loan, Probusinessbank’s assets on brokerage accounts equivalent to the offshore’s debt simply went to the broker. Thus, the offshore could choose not to repay the money at all. Loan repayment became optional — if the offshore did not want to return the funds, there were no consequences for it or its owners; the bank’s assets simply went to the broker. Convenient, isn’t it.

In essence, the bank lost its assets in any case, unless the shareholders voluntarily decided to return the stolen funds.

The term “risk shifting” would be appropriate if the shareholders had taken loans under their personal guarantees or pledged property, implying obligations to repay them, and then invested in risky assets. But this was not the case.

The second incorrect narrative is the claim that “we cannot confirm the theft because the money disappeared without a trace.”

Given the illegal nature of the schemes (including multiple violations of regulations, concealment of information in reports, lying to the regulator, and lack of provisioning), in which the bank’s money secretly went to its shareholders and never came back, such a statement is comparable to saying: “Thieves broke into my house at night illegally and stole my TV, but we cannot establish the fact of theft because the TV disappeared without a trace.”

I honestly don’t even know how to comment on that.

It is very, very strange that such narratives appeared in the article and interview.

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I will also add why this cannot be risk shifting from a technical point of view.

In these deals, the bank’s assets were stolen at the moment the deal was made. There fundamentally could be no risk for the bank, since the future payoff for it on these positions did not depend on the price of market instruments, had approximately zero deltas to anything market-related (or non-market-related, for that matter), and was roughly equal to zero (excluding minor coupon payments in some of the deals).