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Ukraine's Supreme Court Postpones PrivatBank Hearing Citing Media Pressure

PrivatBank was nationalized in December 2016.
PrivatBank was nationalized in December 2016.

KYIV -- Ukraine's Supreme Court has postponed a review of a lower court decision on whether state-owned PrivatBank has to pay back more than a billion hryvnyas ($37 million) to two brothers who lost their savings in the 2016 nationalization of the financial institution.

The Supreme Court's press service said on April 27, the day the hearing had been scheduled, that the decision to postpone the hearing was made due to pressure imposed on judges by media reports and comments on social networks in recent days.

Ukraine's central bank had recognized the tycoon brothers, Ihor and Hryhoriy Surkis, as related parties and included money from their deposits at PrivatBank in a bail-in when one of Ukraine's largest privately owned banks was nationalized.

The Surkis brothers, known as associates of the former owner of PrivatBank Ihor Kolomoyskiy, challenged that decision in court, forcing the central bank to defend its actions.

Kolomoyskiy lost control over PrivatBank when the central bank took it over after it failed stress tests and was deemed to be undercapitalized. Two years later, an independent audit concluded that PrivatBank had conducted “large-scale and coordinated fraud” for at least 10 years before its takeover by the state.

U.S.-based corporate investigative firm Kroll and attorneys at AlixPartners also found a hole of at least $5.5 billion in the bank’s balance sheet.

Kolomoyskiy has denied wrongdoing and maintains that he is the rightful owner of the bank, which he has vowed to regain control over.

Kolomoyskiy faced investigations and government pressure in Ukraine during the presidency of Petro Poroshenko.

He lived in self-imposed exile for nearly two years and returned after President Volodymyr Zelenskiy's election in April last year.

In late March, Ukrainian lawmakers approved the first reading of a bill preventing the former owners of banks that were nationalized or liquidated in recent years from regaining ownership rights or receiving monetary compensation.

With reporting by Reuters
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