No basis for Kolomoisky to retake Privatbank, Bohdan declares

No basis exists for the Ukrainian government to return
Privatbank to its former owners, President’s Office Head Andriy Bohdan said in
an Oct. 23 meeting with the ambassadors of G7 countries. “Having approved a
decision on nationalization, the state invested in Privatbank UAH 155.3 bln,
which enables preserving the funds of Ukrainians. We believe that there is no
basis to return the state Privatbank to its former shareholders,” said a
statement published the same day on the president’s website. The meeting, also
attended by President’s Office Deputy Heads Andriy Smyrnov and Yulia Kovaliv,
addressed the current negotiations with the IMF, reforms to the banking sector
and the return of funds to bankrupted banks.

Recall, Bohdan served between 2014 and 2019 as the
personal lawyer to Ihor Kolomoisky, the billionaire who owned the largest stake
in Privatbank – Ukraine’s largest commercial bank – when it was nationalized in
December 2016. Bohdan was also directly involved in planning Zelensky’s
presidential campaign.

In related news, the former shareholders of Privatbank
– Ihor Kolomoisky, Gennady Bogolyubov et al. – have been required by the London
Appellate Court to compensate the bank GBP 10.9 mln for interim expenses
related to the first-tier court trial, its press service announced on Oct. 23.
The court also ruled the shareholders must compensate expenses for other cases,
including the appellate court. “Though certain time is needed to determine to
overall sum of expenses for payment by the defendants, at this moment they should
pay GBP 3.4 mln by Nov. 12,” the release said.

Evgeniya Akhtyrko: It was vital
for the Zelensky administration to clarify its position on Privatbank with
Ukraine’s Western partners. Andriy Bohdan’s presence at this meeting as the key
figure on the Ukrainian side was intended to confirm to the public that the
Zelensky administration is committed to protecting the interests of the
Ukrainian state ahead of those of Kolomoisky.

This meeting will serve to alleviate further
Western concerns around Privatbank, at least in the short run. In the longer
perspective, however, further court rulings and appeals are likely to raise concerns again. Zelensky having washed his hands of
any influence on the courts remains a concern since bigger players can fill
that vacuum and secure rulings dangerous for Ukraine’s financial security.