Donors getting nervous due to speculations over de-nationalisation of Ukraine's PrivatBank

Donors getting nervous due to speculations over de-nationalisation of Ukraine's PrivatBank
Ukraine's international donors are alarmed by rumours of the possible return of collapsed PrivatBank to its oligarch former owners
By bne IntelliNews March 22, 2019

The United States embassy to Ukraine unexpectedly said on March 21 that its diplomats "are closely monitoring" developments surrounding the nation's largest lender by assets, PrivatBank, nationalised in late 2016.

"Its nationalisation was a milestone in economic reform and the fight against corruption," the US embassy said on its official Twitter page, without providing any other details.

It is not clear, what exactly has triggered the embassy's comment, however, many experts and journalists in Kyiv are speculating that Ukrainian comic and presidential candidate Volodymyr Zelenskiy, a close associate of PrivatBank's ex-owner Ihor Kolomoisky, is ready to de-nationalise the lender.

Co-owned by Kolomoisky, the government nationalised PrivatBank following an expose in bne IntelliNews “Privat Investigations”, in December 2016 after it failed to fulfil a three-year recapitalisation plan.

The bank was found to allegedly have a UAH148bn ($5.6bn) hole in its balance sheet because of related-party financing. In 2017, the then central bank governor Valeriya Gontareva said the post-nationalisation audit of the bank found that 100% of the corporate portfolio had been made to related parties.

Over the past years, Kolomoisky and another the bank's co-owner, Hennadiy Bogolyubov, have successfully defeated Kyiv's legal attempts to recover these funds.

Specifically, in November 2018, a London court concluded that it does not have jurisdiction over Ukraine's claims against the businessmen, who were challenging the applicability of jurisdiction of the High Court of Justice in London.

In December 2017, the same court ruled to freeze worldwide assets of the former owners, including six companies controlled by Kolomoisky and his partner Bogolyubov, worth more than $2.5bn. The court also established a weekly limit of £20,000 on Kolomoisky’s personal expenses.

 

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