U.K. court freezes global assets of former Privatbank owners

The High Court in London granted an order freezing the
worldwide assets of Ihor Kolomoyskyi and Gennadiy Bogolyubov, the formers owners
of Privatbank (PRBANK), the bank said in a Dec. 20 press release. The freeze of
their assets — including six companies that they “are believed to own or
control” — was granted based on evidence than they “extracted almost USD 2
billion from the bank through a particular series of dishonest transactions,”
the bank said. The bank called such transactions “illegal” in the
Ukrainian-language version of the press release.

Commenting on this, Finance Minister Oleksandr
Danyliuk welcomed the decision and said that UAH 140 bln spent by the
government for the bailout of Privatbank should be returned to the state
budget. In his comments on the ruling, Kolomoyskyi characterized the asset
freeze as “a temporary arrest for the period of the case’s review in court.”

Recall on Dec. 20, a local news site reported that
Privatbank has initiated a court hearing against its former shareholders in a
U.K. court. Privatbank was nationalized in December 2016, after which the
government contributed UAH 139.2 bln into its equity. On top of that, the
government bailed in some creditors of the bank, including its Eurobond
holders, at a total amount of UAH 29.4 bln.

Alexander Paraschiy: This is a good start for the Ukrainian government, but it still has a long journey to prove that Kolomoyskyi and Bogolyubov extracted money from the bank bypassing Ukrainian laws. Also, it is strange to see that Privatbank’s and the government’s court claim is for only about USD 2 bln, while earlier the central bank declared over USD 6 bln in funds misappropriated from the bank. In any case, all this is just the beginning of a longlasting legal battle with its results hard to predict. The news is neutral for the bank’s Eurobond holders.