The National Bank of Ukraine (NBU) expresses its indignation over the ruling of Kyiv Pechersk District Court dated 20 April that terminated the surety agreement that obligated Ihor Kolomoiskyi to repay the refinancing loans PrivatBank took out before it was nationalized.
In 2015, Ihor Kolomoiskyi, one of the bank’s owners at the time, entered into personal surety agreements with the NBU whereby he virtually took personal responsibility to repay five refinancing loans granted to PrivatBank in the period from 2008 to 2014. The bank’s debts to the NBU that Kolomoiskyi undertook to repay stand at UAH 9.2 billion at this time.
“Ihor Kolomoiskyi has demonstrated his unwillingness to fulfil his undertaken obligations voluntarily despite the grave consequences that Ukraine is forced to face as a result of his actions. In September 2017, to avoid his joint and several liability under the surety agreements, he took legal action seeking to terminate them. Today’s court decision has not yet come into legal force and will certainly be appealed,” said Viktor Hryhorchuk, Head of the Claims Office at the NBU’s Legal Department.
The NBU is concerned with the outcomes of the hearings in the courts of first instance, as this has already been the third decision in the past three days that is not in the state’s favor.
“The latest of the court rulings creates legal uncertainty and, hence, poses potential risks to the future financial stability of Ukraine. This ruling also makes it more difficult to defend the interests of the state in legal proceedings in other jurisdictions with regard to the compensation of the losses that PrivatBank’s former owners caused the bank and the state to incur,” Viktor Hryhorchuk added.
It is noteworthy that in 2018, the NBU filed four lawsuits with Ukrainian courts and one with the Court of First Instance in Geneva, Switzerland, seeking to force Ihor Kolomoiskyi to repay PrivatBank’s refinancing loans. On 19 March 2019, the Supreme Court of Ukraine sustained the NBU’s cassation appeals and obligated the Dnipropetrovsk Oblast Commercial Court to rule on said lawsuits. The NBU will continue to take necessary legal action to secure the repayment of these funds by Ihor Kolomoiskyi.
For reference:
The decision to nationalize PrivatBank PJSC, as well as other related decisions, was prepared, coordinated, and approved by central government authorities in strict compliance with Article 41.1 of the Law of Ukraine On the Household Deposit Guarantee System.
This decision protected over 20 million Ukrainian citizens who keep their money in this bank and use its services, including 3.2 million pensioners and 1.6 million people from other vulnerable social groups. All of these individuals have retained full access to their bank accounts.
This decision helped avoid systemic risks to the banking sector and secured Ukraine’s financial stability.