PGO opens case on bringing PrivatBank to insolvency

Nationalized PrivatBank (Kyiv) with the help of the auditor has revealed regular violations by the former management of the bank when issuing loans for UAH 133 billion and their servicing and sent these materials to the Prosecutor General's Office (PGO), head of the financial institution Oleksandr Shlapak has said.

"Today the Prosecutor General's Office for the first time has opened criminal cases under Articles 218 and 220 - bringing the bank to insolvency," he said at a press conference at Interfax-Ukraine.

Shlapak said the matter concerns loans for a total of UAH 133 billion to 36 companies, which were issued in October-November 2016 and at the expense of which the loans of 193 other borrowers of the bank were repaid, more than half of which had a rate of 12-12.5% per annum with reference to the hryvnia to U.S. dollar exchange rate and real pledges.

Shlapak said the rate on new loans was 10.5% per annum, while the bank's credit committee approved a rate of 34% per annum, and the bank attracted funds from the National Bank of Ukraine at 22%, from individuals at 19%, legal entities at 14.2%.

"This is the top of the financial pyramid of PrivatBank," Shlapak said.

According to him, almost all new borrowers did not conduct economic activities, but were established less than a year ago and had a negative financial state.