“Privatbank will not be returned to Kolomoiskyi: the decision of the Supreme Court. The decision is final and confirms the legality of the 2016 nationalization.”, — write on: unn.ua
On November 26, 2024, the Supreme Court finally confirmed that PrivatBank cannot be returned to its former owners. The court rejected the cassation appeals of Igor Kolomoiskyi and the Cypriot company Triantal Investments Ltd, upholding the decision of the lower courts to close the case regarding the return of the bank.
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The case was opened based on the claim of tax collectors against the National Bank, the Cabinet of Ministers, the Ministry of Finance, PrivatBank and the Deposit Guarantee Fund. The court once again noted that the procedure for the nationalization of PrivatBank in 2016 was legal, and the rights of the former owners were not violated.
The decision was based on the provisions of Law No. 590-IX, which regulates banking activities. As the representative of the National Bank, Viktor Hryhorchuk, noted, this once again confirms the impossibility of returning PrivatBank to the ownership of former shareholders.
Case details
PrivatBank was nationalized on December 18, 2016 due to its financial insolvency. The National Bank of Ukraine has identified serious problems with capital adequacy, loan portfolio and compliance with regulations.
After the stress test, it became clear that the scale of the bank’s problems threatens the stability of the entire banking system of Ukraine. The NBU recommended the owners of “PrivatBank” to carry out the necessary transformations, in particular, to transfer credit debt to transparent businesses with real collateral that would ensure capital adequacy. However, these requirements were not fulfilled in full and on time.
As of 2016, it served more than 22 million customers, provided about 60% of transactions in the country and issued half of the payment cards in Ukraine. 40% of the deposits of the entire banking system were concentrated in the bank. Before the transfer of the bank to the state, its shareholders were Ihor Kolomoiskyi and Gennadiy Bogolyubov, who controlled 92% of the shares.
On February 15, 2023, the Grand Chamber of the Supreme Court applied the “anti-Kolomoi” law No. 590 for the first time, confirming that “PrivatBank”, nationalized in 2016, will not return to its former owners. On November 15, 2023, the sixth administrative court of appeal of Kyiv also recognized the nationalization as legal, canceling the 2019 decision of the OASK, which satisfied the lawsuit of Ihor Kolomoiskyi.
The “Anti-Kolomoi” law, passed in May 2020, prohibits the cancellation of the nationalization of banks and allows the former owners to claim only monetary compensation. This law became a requirement of the IMF for granting a loan.
Cases related to nationalization, in particular the lawsuit of the ex-chairman of the board of “PrivatBank” Oleksandr Dubilet, show that the former owners tried to challenge the process through numerous lawsuits. However, key court decisions confirmed the legality of nationalization.