Published on December 20, 2019 by RadioFreeEurope
The Security Service of Ukraine addressed the leadership of the nationalized Privatbank with the letter expressing dissatisfaction with the fact that the state financial institution has legal proceedings against former owners of the bank (Igor Kolomoisky and Hennadiy Boholiubov – editors) in foreign jurisdictions, and it has not agreed such actions with the SBU and the Prosecutor General’s Office. It asks to refrain from filing new lawsuits in future without receiving “prior approval”.
Such letter of the Security Service to the leadership of Privatbank is available to journalists of the program Schemes. The letter as of December 17, 2019 was signed by the deputy head of the SBU Volodymyr Horbenko.
“It has been established that representatives of bank institutions initiate lawsuits in foreign jurisdictions and international courts of arbitration regarding the recovery of damages and bringing persons to responsibility, actions of whom had brought the bank to insolvency”, states the SBU letter to Privatbank. “We consider it necessary to ensure the mandatory coordination of lawsuit of bank institutions in international jurisdictions with the Security Service of Ukraine and the Prosecutor General’s Office of Ukraine and prior approval of lawsuits filed to courts outside the territory of Ukraine with the above-mentioned authorities. Please refrain from filing new lawsuit until such prior approval.”
The SBU’s letter to the leadership of Privatbank as of December 17, 2019 was signed by the deputy head of the department Volodymyr Horbenko
The SBU confirmed to Radio Svoboda that letter was indeed sent to Privatbank.
“Taking into consideration the above-mentioned norms of the current legislation, filling lawsuits to international courts of arbitration may adversely affect pre-trial investigations in criminal proceedings concerning crimes in the banking sector”, states the letter of the Security Service of Ukraine which refers to the article 90 of the Criminal Procedure Code.
The Security Service does not have any authority to ask and to demand to agree any international appeals with it, states the lawyer of the NGO Anti-Corruption Action Center Olena Shcherban.
“The article of the Criminal Procedure Code to which refers the SBU in the letter states only about how to evaluate the decision of international courts. And it does not apply to any procedure for filing lawsuits and other actions,” states the lawyer. “This letter can even be considered as gross interference into business activity and pressure. And in general, such practice and demands of the Security Service violate legislation and the Constitution.”
Before the nationalization, tens of billions of hryvnias were withdrawn from Privatbank to shell companies. Agreements with companies were signed at the time when the owner of the bank was Igor Kolomoisky.
As of now, the state has legal proceedings with the oligarch Kolomoisky and his business partners regarding the recovery of billion losses: not only in Ukraine but also abroad, including the United Kingdom of Great Britain, Switzerland and the United States of America, as well as Israel.
The lawsuit in Switzerland was filed by the National Bank because the oligarch lived there. The litigation in the UK was initiated by Privatbank. It stated that according to them, part of money was withdrawn from the bank through British firms. The current management of Privatbank suspects that Kolomoisky and Boholiubov had purchased real estate and other assets in the USA at expenses of appropriated funds of the bank.
As Schemes stated earlier, the consideration of Privatbank’s laswuits in international courts created inconvenience for former owners. For instance, London court froze assets of Kolomoisky and Boholiubov around the world. The litigation in the United States initiated by Privatbank may, in general, threaten businessmen with criminal responsibility.
Privatbank is the largest bank in Ukraine. Before the nationalization in 2016, its beneficial owners were Igor Kolomoisky (49.98%) and his business partner Hennadiy Boholiubov (41.58%), who directly or indirectly owned more than 91.5% of shares. Another 8.5 percent belonged to minority shareholder, including management headed by then-chairman Oleksandr Dubilet.
In December 2016, the Government of Ukraine on the proposal of the National Bank and shareholders of Privatbank (the largest shareholders were Igor Kolomoisky and Hennadiy Boholiubov at that time) made the decision to nationalize this largest financial institution on the Ukrainian market.
The bank passed into state ownership. And the state spent over 155 billion UAH on its capital increase.
According to the NBU, Privatbank suffered losses in the amount of at least 5.5 billion USD before the nationalization.