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Former PrivatBank Owner Says London Court's Asset Freeze Only 'Temporary'

Ihor Kolomoyskiy has accused the National Bank of Ukraine of misrepresenting the state of PrivatBank's finances. (file photo)
Ihor Kolomoyskiy has accused the National Bank of Ukraine of misrepresenting the state of PrivatBank's finances. (file photo)

KYIV -- Tycoon Ihor Kolomoyskiy says that a London court's freezing of assets held worldwide by him and his partner, Hennadiy Boholyubov, in connection with trouble at Ukraine's largest lender, PrivatBank, is only "temporary."

The government nationalized PrivatBank, founded by billionaire former regional governor Kolomoyskiy, a year ago in an effort to avoid a financial collapse in the former Soviet republic. The bank had been dogged by rumors of bad debts caused by risky lending practices.

PrivatBank has since filed several lawsuits against the former owners and on December 19 the English High Court granted a global freezing order on some $2.5 billion worth of assets held by Kolomoyskiy and Boholyubov, including six companies they are believed to own or control.

"This is a temporary freezing order for the time of the trial," Kolomoyskiy was quoted as saying on December 21 by the news service.

At issue are a series of transactions at PrivatBank that it alleges amounted to the misappropriation of funds.

Kolomoyskiy and Boholyubov deny the allegations and have accused the National Bank of Ukraine (NBU), the country's central bank, of misrepresenting the state of PrivatBank's finances.

Kolomoyskiy has turned to the courts to challenge the nationalization and has tried to prevent Ukrainian authorities from cooperating with external companies to investigate the reasons for PrivatBank's insolvency.

"PrivatBank is confident that the English court will determine its claims fairly and objectively and that it will succeed in recovering funds that have been misappropriated from it," the bank said in a statement on December 20 in reaction to the court announcement.

The NBU, which has been administering the troubled institution, said in a statement it supported PrivatBank in its quest to recover funds as it looks to restructure and return to profitability.

The NBU believes that this lawsuit is "good news for taxpayers in Ukraine and the Ukrainian economy," the central bank said in the statement.

Kolomoyskiy, one of Ukraine's richest men, served briefly as head of Dnipropetrovsk Oblast and was credited with preventing the spread of separatist sentiment in the region following Russia's 2014 seizure of Crimea and backing of armed separatists further east in the Donbas.

But President Petro Poroshenko dismissed him in 2015, accusing him of setting up a private militia and trying to take over a state-affiliated oil company.

The region Kolomoyskiy governed, which is now called Dnipro Oblast, borders Donesk Oblast -- one of two regions held in part by Russia-backed separatists whose conflict with Kyiv's forces has killed more than 10,300 people since April 2014 and continues despite a European-brokered agreement to end the fighting and resolve the conflict.

With reporting by Reuters and TSN
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