Former top executives and minority shareholders of PrivatBank have filed lawsuits against the State Deposit Guarantee Fund, the Finance Ministry and state-owned PrivatBank. The suits denounce nationalization of their shares in PrivatBank, weekly magazine Novoye Vremya reported on Jan. 17.

Former top executives of the country’s largest bank and current co-founders of local startup Fintech Bank Oleksandr Dubilet, Oleg Gorokhovsky and Volodymyr Yatsenko are among the claimants. Tetyana Huryeva and Lyudmyla Shmalchenko – other former top managers of PrivatBank – have also filed suits.

These people once held stakes ranging from 0.16% to 2.7% in the bank’s capital as well as considerable amounts of money kept in deposits. Now the claimants are arguing that during the nationalization of PrivatBank in 2016 the state illegally appropriated their shares.

Shmalchenko, for example, argues in her case that the share sale-and-purchase agreements were signed “without due will of the claimant.” In Shmalchenko’s opinion, such agreements were directed to “illegally deprive” her of property, according to a story published by the online tech journal

Gorokhovsky in turn claims that he “still does not understand why I was deprived of the shares, which I have earned while devoting 20 years of my life to PrivatBank.” He hopes the courts will legally evaluate the situation.

Oligarch Ihor Kolomoisky talks to journalists at the Yalta European Strategy conference in Kyiv on Sept. 13, 2019. It is the first time that Kolomoisky visits the annual conference. For many years, he had rivalled with the conference’s organizer and sponsor, oligarch Victor Pinchuk. (Matthew Kupfer)

Back in 2016, Ukraine nationalized PrivatBank on the grounds of the bank’s insolvency. The state bought 100% of the shares in the country’s biggest retail lender for Hr 1, less than 10 cents. After nationalization, the state poured Hr 255 billion in taxpayer money into the bank to stabilize it.

Since then, the bank’s major former controlling shareholder, oligarch Ihor Kolomoisky, has been fighting to regain ownership of the bank. Kolomoisky’s partner Gennadiy Boholyubov – PrivatBank’s former co-owner – has remained low-key during the battle over the bank’s ownership.

Most of the former shareholders began to file lawsuits at the end of 2019. Reportedly, the period for submitting lawsuits in the case was to expire in December 2019, three years after the nationalization.

The battle for PrivatBank’s ownership has transcended Ukrainian borders with major international financial institutions such as the IMF and the EBRD supporting Ukraine’s decision maintain state ownership and to ban Kolomoisky from owning the bank in the future.

Valeria Gontareva, then chief of the National Bank of Ukraine, claimed that the former owners of the bank syphoned off Hr 16 billion, or roughly $660 million, the night before nationalization.


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