12:06 21.04.2019

Kyiv's Pechersky district court terminates Kolomoisky's personal bail contract on refinancing loans

3 min read

Kyiv's Pechersky district court on April 20 terminated the agreement on the contract of personal bail of businessman Ihor Kolomoisky on PrivatBank's refinancing loans received prior to its nationalization. The National Bank of Ukraine (NBU) will appeal this decision.

"The National Bank is concerned about the results of court cases in the courts of first instance as this is the third decision [on disputes related to PrivatBank] not in favor of the state over the past three days," the NBU said on Facebook on Saturday evening.

The information says that in 2015 Kolomoisky, who at that time was a co-owner of the bank, concluded personal surety agreements with the NBU on repayment of five refinancing loans of PrivatBank received during the period 2008-2014.

"In fact, he assumed personal obligations to pay off the bank's debt to the NBU, which today stands at UAH 9.2 billion," the NBU stressed.

"Kolomoisky showed unwillingness to fulfill his obligations voluntarily, despite the dire consequences that the Ukrainian state was forced to incur as a result of his actions. In order to avoid joint responsibility, in September 2017 he appealed to the court with a request to terminate the specified guarantee agreements. Today's court decision in favor of Kolomoisky has not entered into legal force and, of course, will be appealed," NBU Claims Department head Viktor Hryhorchuk said.

He also said that the court decision creates legal uncertainty and, consequently, potential risks for financial stability in Ukraine in the future.

"This court ruling complicates the protection of state interests in lawsuits in other jurisdictions for damages caused to the bank and the state by the former owners of PrivatBank," he said.

In 2018, the NBU filed four lawsuits in Ukrainian courts and one lawsuit in Switzerland against Kolomoisky.

"The NBU will continue to take the legal measures necessary for the repayment of these funds by Kolomoisky", the NBU said.

As reported, Ukraine's government, at the recommendation of the National Bank of Ukraine (NBU) and former shareholders of PrivatBank, the largest of which at that time were Ihor Kolomoisky and Hennadiy Boholiubov, on December 18, 2016 decided to nationalize PrivatBank, the largest Ukrainian financial institution at the time.

Kyiv's district administrative court on April 18, 2019 recognized the nationalization of the bank as illegal based on a law suit filed by Kolomoisky. The NBU and Finance Ministry said they would appeal the ruling after publication by the court of its ruling. Both institutions said the decision to nationalize PrivatBank was correct.

According to the NBU, on January 1, 2019, PrivatBank ranked first in terms of total assets (UAH 525.248 billion) among 77 banks operating in the county.