Ukraine President Vows to Protect Country’s Interests in Privatbank Case
Ukraine President Vows to Protect Country’s Interests in Privatbank Case
(Bloomberg) -- Ukraine’s president rejected returning the country’s biggest lender, Privatbank, to its billionaire former owners but offered to solve the dispute outside the courts in a case that’s drawn the scrutiny of investors and international lenders.
Volodymyr Zelenskiy vowed to protect national interests as media magnate Igor Kolomoisky, an ally, tries to regain control of Privatbank following its 2016 nationalization under the previous government. A ruling on the legality of the state’s takeover may come next week, having twice been delayed.
Speaking at an all-day news conference Thursday, Zelenskiy said he had no way to sway the judiciary and, when asked whether the government would return the stake to Kolomoisky, Zelenskiy said “no.” But as an alternative, he raised the idea of a potential settlement brokered by an unspecified foreign party -- potentially the International Monetary Fund.
“In courts it’s not so fair, not so smooth, and it’s possible we won’t win in all these cases. So we ought to clinch an agreement before the court,” Zelenskiy said at the media marathon in Kyiv on Thursday. “However it will be up to an international expert renowned for his independence to negotiate.”
The suggestion will draw attention from investors and Ukraine’s aid benefactors, including the IMF, which have been closely watching developments around the case. They include attacks against former central bank Governor Valeria Gontareva, whose Kyiv house was burned to the ground. She helped oversee the state takeover in an unprecedented financial-industry cleanup three years ago.
Zelenskiy, warning about corruption in courts, said a potential settlement wasn’t supported by other authorities. “They should be aware that if they lose in the courts, they’ll be responsible,” he said, insisting the central bank and courts are independent and he has no right to interfere.
The president gave no details of what a settlement might look like and also rejected paying the compensation that Kolomoisky and other former owners are seeking if they don’t regain their holdings.
“We must do our best not to pay a kopeck to the former owners,” Zelenskiy said. “We must fight for that.”
Read here about how Kolomoisky won a preliminary victory in the Privatbank case
The president said he hasn’t discussed Privatbank with Kolomoisky. The two share close ties after the mogul’s television channel broadcast a show that propelled Zelenskiy, a former comedian, into the national political spotlight and then supported him during the campaign.
While they both say there’s nothing unusual in their relationship, Zelenskiy’s chief of staff is Kolomoisky’s former personal lawyer, and the head of his television station and three of its journalists are lawmakers for Zelenskiy’s party.
An investigation into Privatbank uncovered fraud that caused a loss of at least $5.5 billion, but Kolomoisky has denied any wrongdoing.
Putting the bank back in private hands may derail reforms crucial to the country’s efforts to regain its economic footing, EBRD Vice President Alain Pilloux said last month.
To contact the reporters on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net;Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net
To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley
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