Businessman Hennadii Boholyubov is going to appeal the decision of the High Court in London, according to which he was found guilty of involvement in the illegal withdrawal of almost $2 billion from “PrivatBank” before its nationalization.
The businessmanʼs press service informed LIGA.net about this.
“We believe that the judge made a significant error in key findings regarding Mr. Boholyubov’s involvement in the fraud, as well as the alleged harm and losses caused to the bank,” said the businessman’s lawyer, George Maylin of the law firm Enyo Law.
Boholyubov denies any involvement in any fraudulent activities and insists on his non-involvement in the financial schemes that have become the subject of legal proceedings.
Nationalization of “PrivatBank” and the court
In 2016, the National Bank, under the leadership of Valeria Hontareva began to reform the banking market and, among other things, analyzed the capital of banks using a methodology it developed with IMF. The National Bank found a “black hole” in “PrivatBank” capital: it arose because 97% of “PrivatBank” loans were issued to “related parties,” most of which were companies without assets and cash flows. Valeria Hontareva spent a long time convincing shareholders to “put” real assets into the bank, and the shareholders fought a positional battle with her.
In December 2016, the National Bank of Ukraine declared “PrivatBank” bankrupt and proposed to the Cabinet of Ministers to nationalize it. On the same day, the National Security and Defense Council, headed by Poroshenko, proposed to the government to recapitalize the bank from the budget, and to the Deposit Guarantee Fund (DGF) and the National Bank to monitor the stability of the financial system. Poroshenko put the National Security and Defense Council’s decision into effect by presidential decree. After that, the Cabinet of Ministers decided to nationalize “PrivatBank”.
The FGV was responsible for the nationalization, it appointed a temporary board of “PrivatBank”. After that, it carried out a bail-in: it forcibly converted money in the accounts of “related persons” into shares of the bank’s capital.
Under Ukrainian law, “related persons” declare their relationship themselves — or the NBU establishes this relationship. In this case, the relationship was established by the Department for Monitoring Persons Related to Banks, which Valeria Hontareva created in June 2015. Five days before the nationalization, a special commission of the NBU issued Resolution No. 105, which listed 1,092 such “related persons”.
DGF conducted a bail-in and then sold 100 percent of “PrivatBank” capital to the Ministry of Finance for one hryvnia. After that, the Ministry of Finance recapitalized “PrivatBank” by $5.8 billion.
Then, the state-owned “PrivatBank” sued its former shareholders — Ihor Kolomoisky and Hennadii Boholyubov — for fraud, and demanded compensation for $1.9 billion in losses with interest.
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