Ukraine tycoon hopes to resume talks on PrivatBank as
lawsuits fly
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 [May 24, 2019]
By Natalia Zinets
KIEV (Reuters) - Tycoon Ihor Kolomoisky
told Reuters he hoped Rothschild bank could help broker an out-of-court
deal with the Ukrainian authorities over PrivatBank, to end his legal
tussles with the state.
One option he hopes could be agreed upon is for Kolomoisky to regain a
25 percent stake in the country's largest lender, he said.
Kolomoisky was PrivatBank's main owner until December 2016 when the
government nationalized the lender as part of a donor-backed clean-up of
the financial system. He has fought a series of legal battles to
overturn the nationalization.
The authorities say overturning the nationalization would rock investor
confidence and rupture relations with the International Monetary Fund,
which helps keep Ukraine's economy on an even keel with a $3.9 billion
aid-for-reforms program.
A Kiev court ruled in April that the nationalization of PrivatBank was
illegal but the central bank said on Friday it had appealed the
decision, as it had previously said it would.
Rothschild had an official mandate in 2017 to try to broker a compromise
between the two sides, which failed.
"We have always said that we are open to negotiations. We believe that
we are the injured party, that we have been robbed," Kolomoisky told
Reuters by phone.
Kolomoisky calculates he is due a 25 percent stake in the bank because
of the capital he had put into it.
"Give us then our 25 percent and keep 75, we will have a joint-stock
company. There will be a 25 percent participation and 75 percent by the
state, as one of the options," he said.
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PrivatBank, the finance ministry and IMF declined comment. Rothschild
did not immediately respond to a request for comment.
The legal wrangle took another turn when Volodymyr Zelenskiy was elected
as the new president in April. Zelenskiy had business ties to Kolomoisky
but denied he would hand back PrivatBank to him or pay state
compensation.
A source familiar with Kolomoisky's talks with Rothschild played down the
prospects of the IMF agreeing to any deal that would involve giving Kolomoisky a
partial stake in PrivatBank.
The central bank said it would not be involved in any resumption of
negotiations, which would be a matter for the ministry of finance and Kolomoisky.
The central bank believes PrivatBank was used as a vehicle for fraud and
money-laundering while Kolomoisky owned it, and said the government was forced
to inject $5.6 billion of taxpayers' money into the lender to shore up its
finances.
Kolomoisky emphatically denies any wrongdoing, rejects the central bank's
assessment of PrivatBank's financial health and said the lender was nationalized
on spurious grounds.
PrivatBank launched a case against Kolomoisky in the Delaware Court of Chancery
in the United States this week, accusing the tycoon and associates of
misappropriating and laundering the proceeds of corporate loans from the bank.
(Additional reporting by Karin Strohecker in London Writing by Matthias
Williams; Editing by Elaine Hardcastle)
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