NBU considers complaint against PwC in Privatbank auditing

Top officials in the risk department of the National Bank of Ukraine (NBU) told the delo.ua news site that Privatbank’s auditing firm, PricewaterhouseCoopers, provided an inadequate evaluation of collateral under the loans provided by the bank. PwC, the bank’s auditor, had no right to conduct an evaluation of the assets that the bank took as collateral, the officials said in an interview published on Jan. 18. The NBU is considering holding the auditor accountable for misconduct, which may include criminal or civil persecution. Possible losses related to the misconduct have yet to be calculated, they said.

In other news, local media reported that a USD 70 mln loan provided to Privatbank by Cargill was bailed-in before the bank’s nationalization. Cargill representatives confirmed the existence of such a loan in comments to the agropolit.com news site published on Dec. 29, but neither confirmed nor denied that it was bailed-in.

Alexander Paraschiy: We share the view that Privatbank’s auditors should be held responsible for manipulations that led to concealing the real situation in Privatbank for many years. Most likely, PwC will face claims not only from the Ukrainian government, but also from the bank’s private creditors, especially those that were bailed-in.

PwC’s reputational losses may cast a shadow on other Ukrainian banks that it is auditing, including those from the Top 40: state banks  Oschadbank and Ukreximbank, as well as private banks Credit Agricole, Vostok and Marfin.

If the information that Cargill’s loan to Privatbank was bailed-in is proven true, the government will have yet another big opponent among international creditors, in addition to the holders of PRBANK Eurobonds.