Ukraine’s Security Service asked PrivatBank to coordinate with Ukrainian authorities before launching any international lawsuits against its former owners, the investigative program Schemes reported on Dec. 20.
The state-owned bank has been suing the former owners Ihor Kolomoisky and Gennadiy Boholyubov and their business associates in multiple jurisdictions alleging that they stole $5.5 billion in assets before the bank was nationalized in 2016. The latest claim was filed on Dec. 18 in Tel Aviv District Court.
Schemes published a Dec. 17 letter, in which Volodymyr Horbenko, the deputy head of Security Service, asked Privatbank to refrain from legal actions before running them by either the Security Service or the Prosecutor General’s Office.
“We consider it necessary to ensure the obligatory coordination of lawsuits of banking institutions in international jurisdictions with the Security Service of Ukraine and the Prosecutor General’s Office of Ukraine and the preliminary coordination of claims brought before courts outside the territory of Ukraine with said authorities,” Horbenko wrote to PrivatBank. “Before that, I would like you to refrain from filing new lawsuits.”
“Filing claims in international arbitration, in certain cases, may negatively affect the conduct of pretrial criminal investigations into banking offenses (in Ukraine),” he added.
The Security Service confirmed the authenticity of the letter.
PrivatBank was nationalized on Dec. 18, 2016 after failing a stress test in Sept. 2016. The National Bank of Ukraine later revealed that PrivatBank’s corporate lending portfolio was almost entirely made up of non-performing loans, often made to companies connected to its owners.
In 2018, a report by forensic auditor Kroll uncovered a “large-scale and coordinated fraud” scheme that emptied $5.5 billion from the bank’s balance while under Kolomoisky’s control. U.K. courts have also recognized that “fraud on an epic scale” has taken place.
PrivatBank has launched lawsuits against Kolomoisky, Boholyubov and various other individuals and companies in the U.S., U.K., Switzerland and Israel, trying to recover as much of the missing $5.5 billion as possible. The bank alleged that the defendants used shell companies to move money out of the bank and park it in assets around the world.
The most recent complaint in Tel Aviv alleges that Kolomoisky transferred $600 million in stolen funds into accounts at Israel’s Discount Bank.
In Delaware, Privatbank is accusing Kolomoisky and Boholyubov of laundering “hundreds of millions” of dollars into U.S. enterprises and real estate.
In London, PrivatBank is pursuing claims that the former owners used three U.K. companies to move $1.72 billion in embezzled funds into offshore accounts. The claims have now reached $3 billion with accruing interest.
Kolomoisky has strongly denied all wrongdoing and is trying to reclaim his stake in PrivatBank in Ukrainian courts.