Ukraine’s PrivatBank open to settlement with former owners
11 Jul 2018

Ukraine’s biggest bank does not rule out settling a legal dispute with its former main shareholders out of court, the head of PrivatBank’s supervisory board said on Tuesday.

The Ukrainian authorities took PrivatBank into state hands in December 2016 and have spent nearly $6 billion so far to plug a hole in its balance sheet caused by what the government says were fraudulent lending practices and money-laundering.

The former owners, two of Ukraine’s richest men, dispute the authorities’ assessment of the bank’s health when it was nationalized.

The case led to hundreds of lawsuits and the authorities see it as a test of their fight against corruption.

An investigation commissioned by the central bank in January found 95 percent of PrivatBank’s corporate loans had gone to companies linked to the former owners or their affiliates.

As a result, more than 85 percent of its portfolio is made up of non-performing loans as of June 1, the central bank says.

Engin Akchakocha, head of the PrivatBank’s supervisory board, said “every option is on the table” when asked if he would consider an out-of-court settlement with the bank’s former main shareholders, although he said he did not want to comment directly on the legal cases.

“Resolving a problem peacefully is easier and better than trying to resolve it through a fight,” he said.

“It all needs appropriate willpower and goodwill,” he said when asked about the prospect of the former owners helping tackle PrivatBank’s bad loans.

“As of today, we are not in communication with the former shareholders of the bank on resolving these issues on a voluntary basis,” he said, but he added that he did not rule out such a route.

Lawyers for Ihor Kolomoisky and Gennadiy Bogolyubov, the two former main shareholders, could not immediately be reached for comment.

– By Matthias Williams, Natalia Zinets, Reuters, 10 July 2018.

Link to Reuters.

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