Ukraine's parliament, the Verkhovna Rada, has adopted the so-called anti-Kolomoisky bank law in a final reading on May 13 that bans the return of failed banks to their former shareholders and clears the way for Kyiv to sign off on a new International Monetary Fund (IMF) deal.
The IMF has insisted on the bill as a pre-condition to giving Ukraine a new Standby Agreement (SBA) that the government desperately needs if it is to meet its debt obligations this year and have enough money to deal with the economic stop-shock caused by the coronavirus (COVID-19) epidemic.
The law is designed to prevent oligarch Ihor Kolomoisky from retaking control of PrivatBank, which was nationalised in 2016 when the National Bank of Ukraine (NBU) found it had a $5.5bn hole in its balance sheet. Kolomoisky and his partners had looted the bank using shell companies and fake loans but have not been held accountable. Kolomoisky has since mounted a campaign in the courts to have the bank returned to his ownership, or at least to have the state pay $2bn in compensation. The NBU has accused Kolomoisky by name of mounting attacks on its staff in a “terror” campaign.
Ukrainian President Volodymyr Zelenskiy has struggled to get the bill passed as several deputies in his own fraction who are associated with Kolomoisky rebelled and refused to vote for the bill. Zelenskiy has had to rely on votes from the opposition parties to get the bill through by only margin of four votes.
Kolomoisky has pulled out all the stops to block the bill. Deputies associated with Kolomoisky introduced over 16,000 amendments to the bill after it was passed in the first reading in a dramatic midnight Rada session on March 30. Those amendments would have taken five months to debate until the Rada passed a new law that changed the procedures and allowed the deputies to vote on the amendments in bulk.
The controversial bill was supported by 270 MPs, well ahead of the necessary 226 votes for the law to pass. The Verkhovna Rada was considering the final readings of the bill according to a simplified procedure due to the record-high number of amendments.
During the parliament's extraordinary meeting on April 16, the bill was backed in the first reading by 242 MPs.
The simplified procedure allows the Rada to adopt any law in cases where MPs have filed record-high number of amendments to such a document, as happened with the banking bill, for which Ukrainian MPs filed about 16,335 amendments.
"Good news. Let’s see what Kolomoisky does next," Timothy Ash, senior sovereign strategist at BlueBay Asset Management, wrote in a short note immediately after the adoption of the document by the Rada.
On May 13, the nation's PM, Denys Shmyhal, said that Kyiv hopes that the IMF will provide the first tranche under new programme by the end of May.
"We hope that by the end of May we will reach signing of the documents and will receive the first tranche of money as it was discussed," news agency Interfax quoted Shmyhal as saying during an hour of questions to the government in Rada. "Today we are on the stage close to signing of the memorandum."