Supreme Court upholds PrivatBank’s nationalization

26 July, 09:07 PM
Oligarch Ihor Kolomoisky (Photo:NV)

Oligarch Ihor Kolomoisky (Photo:NV)

Formerly co-owned by oligarch Ihor Kolomoisky, PrivatBank will remain a state enterprise – for now – Ukraine’s Supreme Court ruled on July 26.

The court put an end to a protracted legal battle, where former owners of PrivatBank were disputing the legality of the bank’s 2016 nationalization.

In particular, the ruling said the National Bank of Ukraine (NBU) withing its right to examine PrivatBank’s operations and recommend nationalization – as a measure to avoid bankruptcy and potential collapse of Ukraine’s banking sector.

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“The results of that inspection showcased a pattern of mismanagement on part of PrivatBank’s former owners before 2016, and the regulator (NBU) was correct to conclude that the only way to stave off (PrivatBank’s) bankruptcy and financial collapse in Ukraine was to nationalize it,” the court said.

PrivatBank’s communication team noted that while the ruling puts an end to this particular case, the bank is still embroiled in a larger dispute with its former owners, in regards to whether it was nationalized legally.

PrivatBank was nationalized in December 2016. The government provided an influx of UAH 155 billion ($4.2 billion) in reserves. Prior to 2016, the bank has accumulated UAH 213 billion ($5.8 billion) in junk loans.

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