NBU fails to foreclose Kolomoisky asset pledged under refinancing loan to Privatbank

Ukraine’s Supreme Court ruled on Jan. 22 to deny
National Bank of Ukraine’s (NBU) request to foreclose the assets of Gajibey Ltd.
related to former Privatbank (PRBANK) shareholder Igor Kolomoisky, the NBU
reported the same day. The assets were pledged under a refinancing loan that
Privatbank took from the NBU in October 2014. Recall, Privatbank was recognized
insolvent and was nationalized in December 2016.

In its reaction, the NBU stated that it does not agree
with the ruling, arguing that its right to foreclose the pledged assets under
the refinancing loan is stipulated by the law, “On the National Bank.” This law
vaguely allows the NBU to withdraw money from a bank’s accounts, and foreclose
the assets pledged under the loan, once a refinancing loan taken by a bank
matures, the NBU said. Meanwhile, other laws stipulate that the pledged assets
can be foreclosed in case the borrower fails to repay related loans.

Alexander Paraschiy: By purchasing Privatbank in the process of its bailout in December
2016, the government took all its assets and liabilities, including liabilities
under refinancing loans. So it’s not very surprising that the court ruled that
Privatbank (which has enough liquidity to repay all the refinancing loans,
worth about UAH 7.6 bln) should repay the loan by itself, instead of depending
on the NBU’s foreclosure of Kolomoisky’s assets. Instead of trying to take some
parts of Kolomoisky’s business pledged under refinancing loans, the government
should concentrate on claiming the total damage Kolomoisky inflicted on the
bank. And in this area, the government hasn’t made much progress, so far.