Vladimir Romanov relinquishes control at Hearts after quitting UBIG board

Vladimir Romanov’s reign at Hearts has come to an end, having resigned from the board of the club’s majority shareholders.

All three directors of Ukio Banko Investicine Grupe (UBIG), the Lithuanian company which owns almost 79% of the total shares in the club, resigned en masse last week, reports in the country stated on Monday.

Current Hearts director Sergejus Fedotovas and a third board member, Rita Matuziene, quit on February 27.

In a statement, Matuziene – the chief executive of UBIG – said the decision came following the suspension of trading at Ukio Bankas, in which Romanov was the majority shareholder before the bank went into administration.

It is not immediately apparent what effect the resignation of the UBIG board will have on Hearts’ future. A new board is due to be elected at a future meeting, which is yet to be scheduled.

Hearts were unavailable for comment when contacted by STV on Monday. Fedotovas, who remains a director on the club’s board, was also unavailable.

Romanov first arrived at Hearts in February 2005, purchasing a 19.6% stake from former chief executive Chris Robinson.

That shareholding was then increased through the years to the current 79% level. A subsidiary of UBIG, HOM 2005, also owns a further 4.5%.

Romanov retains a personal 16.9% shareholding in UBIG. He has claimed to have lost £250m through the collapse of Ukio Bankas.

In Hearts’ last audited accounts, it was noted that the club’s debts had fallen from £36.1m in 2010 to £24m by last June. This was because around £10m of the money owed to UBIG was exchanged for shares in the club, while £8.8m owed to Panama-registered Natborg Projects Corp was forgiven as they were a "related party" to Hearts.

Auditors Johnston Carmichael LLP noted that the club made a £511,000 profit between August 2010 and June last year, but Hearts "has incurred significant operating losses in recent years and trading activities result in significant ongoing increases in debt."

The accounts released last April noted that the debt owed to UBIG was at 4.5% interest and that the bank continues to provide "short term loans and funding to allow the company to meet its day-to-day funding requirements."

Johnstone Carmichael said in the report that the directors of Hearts, including Mr Romanov’s son Roman, had "received written confirmation from the directors of UAB UBIG that it will provide sufficient funding to enable the company to meet its liabilities as they fall due for the foreseeable future."

However, the auditors felt that there had been "limited" evidence provided to them about whether UBIG is "able to meet its commitment to provide sufficient funding to enable to company [Hearts] to meet its liabilities".

The auditors also stated the Mr Romanov has a controlling interest in Ukio Bankas, which "charged interests on loans in place" during 2009/10 of £434,000.

At July 2010, the auditors noted that Hearts owed UBIG £24.3m in "payments on behalf of the company in respect of player transfer fees and other sundry creditors and interest accrued on these amounts."

In 2010, the club was loaned £8.9m from a separate Romanov-controlled company, UAB Hearts Developments. This debt was subsequently transferred to a Panama-registered company and 'related party', Natborg Projects Corp, which forgave £8.8m of it in June 2011.

ImpExNet, which is also described as being controlled by Mr Romanov, forgave a further £5.9m of debt transferred to it from Heart of Midlothian plc in 2011.