Ukraine money-go-round: how $1.7 billion in bank loans ended up offshore
24 Jan 2018

When Ukrainian company Profit signed a $48.5 million deal with a British firm in 2014, it became part of what prosecutors in Ukraine say was a potentially criminal scheme that moved $1.7 billion from the country’s biggest lender to offshore accounts.

With a loan it had raised from PrivatBank in east Ukraine, Profit paid Trade Point Agro Limited in London on Aug. 18, 2014 for 24,250 tonnes of polyethylene terephthalate, a polymer used in fabrics and plastic containers, according to a legal complaint Profit filed in November 2014 to try to recover the funds.

But Trade Point Agro failed to deliver the goods and deposited the money in PrivatBank’s Cyprus branch, according to prosecutors. When a Ukrainian court ruled against Trade Point Agro and ordered it to repay Profit, Trade Point Agro did not appeal against the ruling but did not pay the money back.

The deal between Profit and Trade Point Agro is part of a pre-trial investigation that is still under way into whether officials at PrivatBank illegally took money from the lender through shady loan practices involving dozens of companies.

Finance Minister Oleksandr Danylyuk regards the case as a “litmus test” for the effectiveness of the battle against corruption, success in which is vital for Ukraine to receive international credits.

– Reuters

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