Ukraine's PrivatBank, nationalised in late 2016, has instituted legal proceedings against its former owners, Ihor Kolomoisky and Gennadiy Bogolyubov, as well as "other individuals and companies", before the Court of Chancery of the State of Delaware, the bank said in a statement e-mailed to bne IntelliNews on May 23.
With this complaint, the bank is seeking "redress in respect of losses amounting to hundreds of millions of US dollars, which PrivatBank asserts it has suffered as a result of various unlawful acts perpetrated against it by its former owners, their close associates Mordechai Korf, Chaim Schochet and Uriel Laber, and various US-registered companies in which those individuals are and have been involved,” the statement reads.
Privatbank has filed a lawsuit with Delaware Court of Chancery that details how some of the approximately $5.5bn of depositors’ money that was removed for the one-time largest commercial bank in Ukraine by its owners.
Kolomoisky’s partner and former co-owner of Privatbank Hennadiy Bogolyubov and their investment companies were also named in the suit, reports Interfax Ukraine.
Privatbank claims that Delaware-chartered shell companies that bought up factories and commercial real estate around the United States. After Privatbank was nationalised in 2016 the National Bank of Ukraine (NBU) commissioned Kroll to carry out a forensic investigation that traced much of the money flowing out of the bank to the US and estimated the total amount of assets taken from the bank at $5.5bn.
The Delaware lawsuit named three "agents" of the scheme — Mordechai Korf, Chaim Schochet and Uriel Tzvi Laber — along with 20 Delaware-chartered corporations and limited liability companies that were used to invest the money coming from Privatbank in the US.
Privatbank said that it will also pursue alter-ego liability and corporate veil-piercing claims in the Delaware case, in pursuit of claims of unjust enrichment, civil conspiracy, state fraudulent transfer and violations of Ohio's racketeer influenced and corrupt organizations statute.
The alleged scheme by the individuals and companies involved "had a particularly profound impact" in Delaware, where the allegedly fraud-supporting companies were formed, the suit said, and in Ohio, where cash was used to buy up valuable commercial real estate. Other investments were funnelled to cities in Texas, Florida and Kentucky, among others, with activities in more than a dozen states implicated, Law360 said, as cited by Interfax Ukraine.
The bank added in the statement that the US complaint arises out of "a series of schemes which bear the hallmarks of fraud" and which, PrivatBank asserts, were orchestrated by Kolomoisky and Bogolyubov, together with the other defendants, to acquire hundreds of millions of dollars worth of assets in the US through the misappropriation and laundering of the proceeds of corporate loans issued by PrivatBank whilst under the control of its former owners.
"Consistent with its stated strategy of seeking redress for the losses it suffered prior to its nationalisation, PrivatBank is pursuing different claims in different jurisdictions in respect of different alleged frauds and losses," the statement reads.
"Following on from the claim being brought by PrivatBank against Kolomoisky and Bogolyubov before the English Court, which is concerned with different loans having the signs of fraud, these proceedings in the United States represent the latest step in PrivatBank’s international legal efforts to hold its former owners and related others to account for losses caused to the bank," the lender added.
The statement appeared against a background of a snowballing legal crisis over the PrivatBank nationalisation between the National Bank of Ukraine (NBU), the Ukrainian government and ex-owner oligarch Kolomoisky. However, last week Ukraine’s Supreme court overturned the ruling by lower courts to de-nationalise the bank and return it to its former owners. Moreover, the NBU threatened to immediately renationalise Privatbank should it be returned to its former owners.
On April 8, Kolomoisky said that he is going to seek $2bn of compensation from the nation's government. "I don't need [to get back] PrivatBank. But there was $2bn in capital there. Let them [the Ukrainian government] return it to me and there will be no problems," Kolomoisky said in an interview with the Ekonomichna Pravda online outlet.
On April 18, the Kyiv Administrative Court backed Kolomoisky's lawsuit, ruling that PrivatBank's nationalisation was unlawful.
On May 21, Ukrainian President Volodymyr Zelenskiy appointed Andriy Bohdan as head of the presidential staff. Bohdan is a chief lawyer for Kolomoisky, who is widely considered to be Zelenskiy's mentor and sponsor.
The businessman returned to Ukraine on May 16 from Israel, ending an absence from Ukraine that began in June 2017. On May 12, the other former co-owner of PrivatBank, Bogolyubov, also returned to Ukraine from Israel.