In 2016, they took away his bank after he allegedly took away $5.5 billion from it.
The legal team of Ihor Kolomoisky – an oligarch and alleged fraudster with ties to President Volodymyr Zelensky – faced PrivatBank, the National Bank of Ukraine and the Ministry of Finance in a Kyiv courtroom today. Today’s hearing finished with the judge scheduling the debates for Oct. 17. That is going to be the final stage of the process.
The hearing, taking place throughout the afternoon of Oct. 8 at the Kyiv Economic Court, is an appeal that represents Kolomoisky’s latest attempt to win back his shares in PrivatBank, the largest Ukrainian bank, nationalized in 2016 at a cost of $5.5 billion to Ukraine’s suffering taxpayers.
A lot is tied up in the ultimate fate of Kolomoisky and PrivatBank. The International Monetary Fund is not expected to give Ukraine any more loans if the courts and government go soft on Kolomoisky. And President Volodymyr Zelensky is being watched closely for whether he will protect Kolomoisky and his business empire, or break with his former business partner whose television station broadcast the president’s comedy shows, making him a national figure who was able to win the presidency in April.
Kolomoisky and Triantal Investments Ltd, a Cypriot company that he owns, is demanding that the court reverse the share sale agreement on PrivatBank’s nationalization and return to him 41.3 percent of PrivatBank shares that he owned, and 16.5 percent in shares that belonged to Triantal.
This lawsuit is among hundreds that Kolomoisky has filed against PrivatBank, the NBU and their supporters in Ukraine, all part of a legal campaign to reclaim either the bank or its assets.
The case
Kolomoisky first applied to Kyiv Economic Court on April 9, and since then the court hearings were regularly postponed.
On Oct. 8, Kolomoisky’s lawyers tried to question the jurisdiction of the Economic Court and bring the claim to the Supreme Court. That petition was rejected by the judge, according to lawyers in attendance who spoke with the Kyiv Post.
“We hope that in today’s court hearing (Kolomoisky vs PrivatBank on de-recognizing the share sales agreement) the judge will accept our arguments and the proceedings will get dropped or at least stayed,” said Artem Shevalev, deputy chairman of the supervisory board at PrivatBank. “This will be a good sign… and will hopefully allow all stakeholders to benefit from the results of the London appeal ruling, that should come out later this month.” PrivatBank has filed a civil lawsuit against Kolomoisky in London, which is currently held up on an appeal from Kolomoisky over jurisdiction of the claim.
But there are already some causes for concern over the Oct. 8 court hearing in Kyiv. It is taking place behind closed doors because a key contract that is part of the dispute is subject to banking secrecy laws. This was imposed by presiding Judge Liudmila Shkurdova in May. Since then, journalists and the public have been banned from the courtroom.
“Our legal teams are trying to make it public,” said a spokesperson for PrivatBank before the hearing, adding that the full written decision of the judge will also not be publicly available.
Judge Shkurdova
Shkurdova survived the 2014 lustration and continued working as a judge, where she oversaw a number of high-profile cases.
In 2014 she arrested the assets and real estate belonging to the “Eastern European Fuel and Energy Company” (EEFE), owned by the controversial Ukrainian businessman Serhiy Kurchenko. She then lifted that arrest in 2015.
In Ukraine, Kurchenko is wanted on suspicion of embezzlement of funds and various crimes amounting to alleged abuse of authority. Kurchenko fled to Russia following the 2014 EuroMaidan revolution that drove the Russian-backed president Viktor Yanukovych from power.
According to an openly available e-declaration of assets from Shkurdova, she drives a Mitsubishi ASX that she bought in 2013 for Hr 206,114. Now the price tag of such a car is Hr 530,000, or about $21,300.
Shkurdova also lives in a 71 square meter apartment in Kyiv that the Holosiiv district administration provided her with back in 2011, when she was appointed as a judge at The Kyiv Economic Court.
At the time, she reportedly needed a place to live in Kyiv but her declaration in 2011 showed she also had a 63 square meter house in Poltava region, and a 42 square meter land plot with another apartment in Poltava, a city 350 km east from the capital. The Poltava house disappears from her declarations around 2016.
According to Ukrainian law, judges are required to leave state-given accommodation if they purchase real estate in the city where they work. Such state-owned apartments are only provided judges “in need of better living conditions”. There is no indication that Shkurdova violated the law.
According to declarations that Shkurdova filed in March 2019, she has a bank account with PrivatBank.
Kolomoisky against everyone
Kolomoisky, the NBU, and PrivatBank are locked in an intensifying legal battle.
In April, PrivatBank and its supporters suffered a setback when the Kyiv District Administrative Court issued a controversial ruling that stated its nationalization was illegal.
Another blow came in May when the Sixth Appellate Administrative Court of Kyiv rejected the NBU’s appeal. The NBU has vowed to appeal in cassation.
The nationalized bank meanwhile, is suing Kolomoisky in London and Delaware. The decision of the Court of Appeal of England and Wales is expected later this month. It is alleged that Kolomoisky and his business partner siphoned out billions through a Ponzi-like scheme and laundered the money in international companies.
This alleged practice is what led to the bank requiring the $5.6 billion state bailout, which PrivatBank hopes to make Kolomoisky pay. He allegedly brought Ukraine’s largest lender to the brink of ruin with fraudulent insider lending. In 2016, the state stepped in and took over the bank.
PrivatBank’s nationalization
Ukraine’s international partners, including the International Monetary Fund, strongly supported the decision to nationalize PrivatBank to protect it from collapse, but Kolomoisky has fought to reclaim the bank or be compensated for his alleged losses ever since.
The billionaire’s business dealings have also appeared in the crosshairs of the U. S. Federal Bureau of Investigation (FBI), according to an April report by The Daily Beast.
Multiple experts have told the Kyiv Post that Kolomoisky is confident about winning court cases at home and that any victories in Ukrainian courts will give Kolomoisky’s lawyers a tool to use in the international cases.
