Ukrainian depositors of former Alfa-Bank urged to settle: Key risks to know
Ukrainian investors linked to former Alfa-Bank offered deals to recover funds - lawyer warns of legal risks (photo: GettyImages)
Ukrainian holders of debt instruments linked to the former Alfa-Bank Ukraine are being offered settlement agreements aimed at recovering their funds, states lawyer Rostyslav Kravets in a comment to RBC-Ukraine.
According to Kravets, the case concerns so-called Loan Participation Notes (LPNs) — complex cross-border financial instruments issued through a structure involving Russian shareholders of the bank who are now under international sanctions.
The lawyer noted that some investors, who had previously filed lawsuits and obtained favorable court rulings in Ukraine, are now being approached with offers to accept deferred repayment. Under this scenario, the funds would only be returned if international courts rule in favor of the bank’s former owners, including sanctioned Russian oligarch Mikhail Fridman.
Kravets warned that entering into such settlement deals could carry legal risks. Specifically, agreements involving sanctioned individuals may be interpreted as indirect support for the aggressor state.
"Sanctions against the former bank owners are already in effect, including in Ukraine. Participating in arrangements that directly or indirectly support their legal claims against the state could raise serious questions from law enforcement agencies," Kravets stated.
Some bondholders continue to defend their rights in court and already hold favorable rulings. Kravets urges all investors to pursue legal means to recover their funds.
What are LPNs and why the issue arose
Before Russia’s full-scale invasion of Ukraine, Alfa-Bank Ukraine attracted funds through the Cypriot company ABH Ukraine Limited, which issued LPNs via E.M.I.S. Finance B.V., a Dutch entity. These debt instruments were marketed to Ukrainian businesspeople and private investors — primarily through A-Club, Alfa’s premium banking service.
The LPNs were offered as an alternative to foreign currency deposits, with annual yields ranging from 5% to 12%. Unlike traditional bank deposits, however, LPNs were not protected by the Deposit Guarantee Fund and remained outside the regulatory framework of Ukraine’s banking system.
As of February 2022, over $400 million in LPNs remained in circulation. Following the imposition of sanctions against Alfa-Bank’s shareholders, E.M.I.S. Finance ceased servicing the obligations. The former shareholders have since filed claims in international courts, seeking over $1.4 billion in compensation from Ukraine.
Government action
On July 21, 2025, Ukraine’s National Security and Defense Council (NABU) adopted a resolution to intensify measures aimed at locating, identifying, and confiscating assets of individuals under sanctions, including those subject to asset freezes. Authorities are expected to take action within the next three months.
