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Former owner of Ukraine's PrivatBank may seek compensation from government
November 6, 2017 / 4:42 PM / 18 days ago

Former owner of Ukraine's PrivatBank may seek compensation from government

KIEV, Nov 6 (Reuters) - A former shareholder of Ukraine’s largest lender PrivatBank warned the government on Monday he may file a claim for compensation for the “unlawful expropriation” of the bank, which was nationalised last December.

PrivatBank was taken under state control with the backing of Ukraine’s top creditor, the International Monetary Fund, after what the central bank has deemed risky lending practices left it with a capital shortfall of more than $5.5 billion.

Former owners Ihor Kolomoisky and Gennadiy Bogolyubov, Ukraine’s second and third-richest men according to Forbes Ukraine, contest the authorities’ assessment of the health of the bank’s loan portfolio and allegations of wrongdoing.

In an emailed statement, Bogolyubov said he was seeking compensation for the nationalisation and for “untrue allegations about related-party lending, non-performing loans and misappropriation of funds”.

“Bogolyubov is confident that an independent arbitration tribunal will see through them to award him full compensation for the expropriation of his investments in PrivatBank and moral damages for the harm that Ukraine has sought to cause to his reputation,” it said.

The statement did not say how much compensation Bogolyubov is seeking.

The finance ministry would not immediately comment, a spokeswoman said.

The authorities have estimated that 97 percent of PrivatBank’s corporate loans had gone to companies linked to its shareholders.

Bogolyubov, who has British citizenship and lives in Geneva, said he could pursue his claim under a Bilateral Investment Treaty (“BIT”) between the United Kingdom and Ukraine aimed at protecting foreign investors in Ukraine.

Bogolyubov is worth around $1.3 billion, according to Forbes Ukraine’s 2016 rich-list. (Reporting by Alessandra Prentice; Additional reporting by Pavel Polityuk Editing by Jeremy Gaunt)

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