Biggest Investor in Ukraine Wants Tougher Stance on Privatbank
Biggest Investor in Ukraine Wants Tougher Stance on Privatbank
(Bloomberg) -- This year’s biggest investor in Ukraine says the government must show it’s serious about recouping the billions of dollars pumped into the country’s No. 1 lender.
The fate of Privatbank, nationalized in 2016 after a crippling capital hole was discovered, has become a test of whether President Volodymyr Zelenskiy is prepared to stand up to Ukraine’s powerful tycoons.
The bank’s billionaire former owners are challenging the state takeover in court. One was a business associate of Zelenskiy whose sway in Kyiv is the subject of much speculation.
“The state needs to be clearer that it supports the recovery of assets, the money that’s been fraudulently withdrawn,” said Alain Pilloux, a vice president of the European Bank for Reconstruction and Development, a longstanding creditor that plans to invest as much as 1.2 billion euros ($1.3 billion) in Ukraine in 2019.
“It’s important that we, the international community, especially the EBRD and the IMF, are convinced the state is supporting even morally the efforts to recover the money,” he said Tuesday in an interview on the sidelines of an investment conference in Mariupol.
The International Monetary Fund put off a decision on offering a new loan to Ukraine over concerns about Privatbank’s future and central-bank independence.
Pilloux said he’s “reasonably confident” on the latter issue after assurances from Zelenskiy.
Of more interest is what Ukraine will do if Privatbank’s ex-owners are successful in their legal efforts over the state’s takeover. While Zelenskiy says the bank shouldn’t be returned to them, one of the tycoons sees room for a “compromise.”
“I’d like to understand a bit better what action will be taken by the state in case a court reserves the nationalization,” said Pilloux. “What’s the plan?”
To contact the reporters on this story: Daryna Krasnolutska in Kyiv at dkrasnolutsk@bloomberg.net;Kateryna Choursina in Kyiv at kchoursina@bloomberg.net
To contact the editors responsible for this story: Scott Rose at rrose10@bloomberg.net, Andrew Langley, Balazs Penz
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