Ukraine pushes ahead with legislative agenda as Privatbank case delayed again

Ukraine pushes ahead with legislative agenda as Privatbank case delayed again
The court verdict on the denationalisation of Ukrainian bank Privatbank has been delayed again, seen as a litmus test for the new Zelenskiy adminstration
By bne IntelliNews October 18, 2019

Despite the growing scandal surrounding oligarch Ihor Kolomoisky’s attempts to denationalise Privatbank, Ukraine’s Verkhovna Rada pushed ahead with its hectic legislative programme and passed more pro-reform laws.

The Kyiv Economic Court was supposed to rule in a case brought by Kolomoisky questioning the legitimacy of the National Bank of Ukraine (NBU) to privatise Privatbank, then Ukraine’s biggest commercial bank. The ruling was originally due on October 9, the day before Ukrainian President Volodymyr Zelenskiy gave his first marathon press conference.

The hearing was delayed again after protestors gathered outside the court room to protest against the case, which is widely believed to be biased in Kolomoisky’s favour. The Kyiv Post reported last week that lawyers acting for Privatbank, which is now owned by the state, have complained that the judge is blatantly biased to his benefit.

There were also reports of a bomb planted at the courthouse.

The case is increasingly seen as a litmus test for Zelenskiy whose honeymoon with international institutions is over. His lack of a clear statement has led the International Monetary Fund (IMF) to suspend talks on a new Extended Fund Facility (EFF) that the government was hoping to quickly rush through after taking power in August to help attract investment.

Privatbank just won an important victory in another case in London, where the court of appeal upheld a decision to freeze $2bn worth of Kolomoisky and his partners’ assets. Assets were seized as part of the lender’s efforts to recover $7.2bn looted under old ownership. The bank is now free to pursue a lawsuit claiming fraud on a massive scale in which shell companies owned by shareholders emptied it of money.

“There is no difficulty with the Bank’s proving a good arguable case of a fraudulent scheme… and money laundering on a vast scale,” the judge said in his conclusions.

More reform laws passed

In the meantime the Rada continues to push through a blizzard of new pro-reform legislation.

A new whistleblower law was finally passed on October 17 as part of a broad fight again endemic corruption. The Rada also passed a bill seeking to relaunch the judicial reform that the Zelenskiy administration says was sabotaged by former president Petro Poroshenko. It reviews judges’ performance in an attempt to clean out the system of corrupt judges.

The judiciary’s two governing bodies, the High Council of Justice and the High Qualification Commission of Judges, were accused of botching judicial reform and protecting corrupt judges under Poroshenko, although they denied the accusations, the Kyiv Post reported.

The bill, passed in the second of three readings, envisages replacing all the members of the High Qualification Commission of Judges, the agency that vets and hires judges. The bill also stipulates halving the number of Supreme Court judges from 200 to 100 and selecting a new, smaller Supreme Court from the existing judges.

And in another blow for justice, the National Anticorruption Bureau of Ukraine opened a criminal investigation against former Prosecutor General Yuriy Lutsenko at the request of Kyiv’s Solomyansky District Court.

Lutsenko was notorious for failing to investigate or prosecute anyone while general prosecutor under Poroshenko.

NABU’s press office confirmed reports that a case has been opened against Lutsenko and that he is under investigation for criminal abuse of office.