Compromise with Kolomoisky being sought over Privatbank, FT says

Ukraine’s PM Oleksiy Honcharuk told ft.com that the
president wanted to reach a settlement with Ihor Kolomoisky on Privatbank,
Ukraine’s biggest lender that was recognized insolvent and nationalized in
December 2016. As part of the rescue, the government contributed UAH 155 bln
(USD 5.9 bln) to the bank’s equity. Kolomoisky, among the key shareholders of
the bank before its collapse, became the main sponsor of Zelensky’s
presidential campaign and has filed more than 600 lawsuits – as reported by
ft.com – challenging the nationalization. Kolomoisky’s personal lawyer for five
years, Andriy Bohdan, serves as head of the President’s Office.

“I’m completely convinced that we need to concentrate
on growth now and look for joint solutions instead of spending our resources on
destroying each other. So I am very positive about any rhetoric directed
towards searching for a compromise,” Honcharuk said in comments to ft.com
published on Sept. 17. He added that a possible solution on the bank will be
found “together with the IMF,” whose mission has been in Kyiv since Sept. 11.

Commenting on the ft.com article, Honcharuk wrote in
his blog the same morning that “the government is not conducting any
negotiations with anyone.”

Recall, in their similar statements on Privatbank, the
EU office in Ukraine, the U.S. embassy in Ukraine and the IMF representative
office in Ukraine commented on April 18-19: “It is important that the
authorities continue their efforts to recover losses from former owners and
related parties of failed banks. Ukraine’s international partners will be
closely monitoring developments in this area.”

Alexander Paraschiy: It’s
positive that Honcharuk mentioned in his comment to ft.com that a solution will
be found jointly with the IMF. Such a solution should not jeopardize Ukraine’s
relationship with IFIs, which could be disastrous for the national economy. Our
reading of the position of Ukraine’s Western partners is that any “solution” on
Privatbank comfortable to them implies a recovery by the state, which now
controls Privatbank, of its losses from the former owners, including
Kolomoisky.

The IMF and other partners of Ukraine are unlikely to
tolerate other “compromises,” in our view. So far, we do not see a simple
solution to the Privatbank case that could satisfy both the former owners and
IFIs.