KYIV -- A Ukrainian court has suspended a hearing on whether to return share ownership of PrivatBank to its previous owners, in a case that is being closely watched by Ukraine’s international lenders and foreign investors as a litmus test for commitments to genuine reform.
The hearing will resume once another case related to the nationalization of Ukraine’s largest lender ends in an administrative court, the acting chief of Kyiv’s economic court, Petro Palamar, told Bloomberg on October 17.
The economic court was in the final stage of deciding whether the 2016 takeover of PrivatBank from its previous owners, billionaires Ihor Kolomoyskiy and Hennadiy Boholyubov, by the National Bank of Ukraine (NBU) was lawful.
Three years ago, international auditors found a nearly $6 billion hole on the bank’s balance sheet, threatening the overall health of the nation’s fragile banking system that historically was known for shoddy lending practices.
In a separate case, the Kyiv District Administrative Court in April ruled to reverse the nationalization of PrivatBank, a decision that was later appealed by the government and the NBU.
Kyiv’s economic court is now awaiting a final decision on this case before proceeding.
Kolomoyskiy has been vocal about his intention to regain control of PrivatBank and has launched litigation in Ukraine and in foreign jurisdictions in an attempt to restore ownership rights to the financial institution.
The halting of the economic court hearing comes as a Ukrainian delegation is visiting Washington to continue talks with the International Monetary Fund (IMF) for a new lending program.
In late September, an IMF mission left Ukraine without the two sides securing a new deal.
“Growth is held back by a weak business environment -- with shortcomings in the legal framework, pervasive corruption, and large parts of the economy dominated by inefficient state-owned enterprises or by oligarchs -- deterring competition and investment,” the IMF said at the time.
About 45 minutes before the scheduled start of the October 17 hearing in Kyiv, the court said it had received an anonymous phone call about an explosive device inside the building.
The building was evacuated immediately and authorities began scouring the site.
The hearing's last session took place on October 8.