By Sam Tobin
LONDON (Reuters) -Ukraine’s PrivatBank accused its former owners in a London court on Monday of using “absolute power” to siphon off nearly $2 billion from the country’s largest lender.
The case is being closely watched by politicians and investors as a test of Ukrainian President Volodymyr Zelenskiy’s willingness to pursue reforms and tackle the corruption which has blighted Ukraine for years, amid its ongoing war with Russia.
PrivatBank’s lawsuit accuses Ihor Kolomoisky and Gennadiy Bogolyubov of orchestrating sham loans and supply agreements between 2013 and 2014 to defraud it on an “epic scale”.
Kolomoisky and Bogolyubov both deny any wrongdoing. They say there was no misappropriation from PrivatBank, which they argue has no evidence they had any knowledge of, or involvement in, the alleged fraud.
PrivatBank, which is seeking about $4.2 billion including interest, has pursued Kolomoisky and Bogolyubov in the English courts since 2017, the year after it was nationalised in late 2016 as part of a clean-up of Ukraine’s finance system.
The bank’s lawyer Andrew Hunter said in court filings that its lawsuit “concerns fraud on an epic scale, covered up by money laundering on a vast scale”.
Zelenskiy, who rose to prominence as a comedian and playing played the role of president on show aired on a Kolomoisky-owned TV station, has denied having personal ties to the businessman.
Kolomoisky appears to have fallen foul of a crackdown launched by Zelenskiy on individuals who wield outsized political influence.
‘ABSOLUTE POWER’
The London trial of PrivatBank’s case was due to start last year but was delayed because of Russia’s invasion, as Kolomoisky and Bogolyubov were unable to give evidence.
They have since decided not to do so, which PrivatBank says was because they have no answer to the allegations.
Kolomoisky’s lawyer Mark Howard said in court filings that PrivatBank’s case must fail because the loans at the centre of the lawsuit have been almost entirely repaid.
Bogolyubov’s lawyer Clare Montgomery said in court filings that “no funds were in fact misappropriated from the bank”.
Hunter, PrivatBank’s lawyer, said Kolomoisky and Bogolyubov’s case was that they were “the oligarch equivalent of absentee landlords”, but said they had actually “absolute power at the bank” until it was nationalised.
(Reporting by Sam Tobin; Editing by Emelia Sithole-Matarise, Marc Jones and Alexander Smith)
