January 17, 2019 / 1:43 PM / 4 months ago

Ukraine's PrivatBank expects court appeal against former owners this year

KIEV, Jan 17 (Reuters) - PrivatBank expects an appeal in its case against its former owners to be heard in a London court in 2019, part of an effort by Ukraine’s largest bank to recover $2 billion it says was lost to fraud, the head of its supervisory board said on Thursday.

PrivatBank’s case, which the government describes as a test of its ability to fight corruption, faced a setback last year when a London’s High Court ruled that the matter was outside its jurisdiction.

The former main shareholders, Ihor Kolomoisky and Gennadiy Bogolyubov, deny any wrongdoing and say the bank was forcibly nationalised in 2016 without proper justification.

Supervisory board chief Engin Akcakoca told Reuters he expected the appeal “to be over this year”.

“Our job is to try to get back or recuperate whatever the bank lost, so it is our job to fight for that wherever we can,” he said in an interview in his office.

Clawing back some of the money which the bank believes was lost to fraud could help the government shore up its finances and tame its debt burden before presidential and parliamentary elections this year.

The London High Court ruled in December that the bank had dragged three London-based companies into the heart of its claim solely to have the case tried in the British capital and said it should be tried elsewhere.

PrivatBank returned to profit last year for the first time since 2015, reporting a net profit of 5.11 bln hryvnias ($188 million) for January-September. Akcakoca, a former chief banking regulator in Turkey, expects the bank to stay in profit in 2019.

The government wants to sell PrivatBank back into private ownership again in 2022.

Asked if this timetable could be achieved, Akcakoca said: “Again, it’s assumption and guesstimate, but we will do our best to sell it, one way or another.”

He said PrivatBank would become attractive to investors as long as it stuck to its new strategy of focusing on retail banking and made only limited forays into corporate lending.

“We’ve got 2,000 plus branches, 22,000 staff members, we are market leaders in payment systems, in credit cards, so retail is by nature the bread and butter business of this bank,” he said.

PrivatBank’s assets stood at 271 billion hryvnias in September.

PrivatBank is also at the centre of other cases. Ukraine’s central bank has filed a claim in Switzerland against the former shareholders seeking compensation for loans made to the bank before it was nationalised. (Editing by Edmund Blair)

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