Kolomoisky’s Privatbank passes to Ukrainian government ownership


December 18, 2016 -Fort Russ News –

Lenta.ru Finance, translated by Tom Winter –

A Privatbank credit card. “Glory to Ukraine! Glory to the heroes.”

Ukraine to completely nationalize Privatbank

The Government of Ukraine has supported the proposal of the National Bank and the Financial Stability Board for the transition Privatbank to hundred percent state ownership. This was reported on the website of the Cabinet.

It is envisaged that the state, represented by the Ministry of Finance, will own 100 percent of the shares of Privatbank, and will guarantee the smooth functioning of the institution and preservation of assets of its clients.

National Bank Chairman Valery Gontareva and Finance Minister Alexander Danyluk informed the cabinet members that the private shareholders of Privatbank appealed to the government with a proposal that the government become full owner, in the interests of the bank’s clients.

The transition period begins on December 19. The government has promised to ensure “a smooth transition with stable and normal operation of the institution for its customers.”

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It is noted that these actions are “taking place in coordination with international financial institutions and with their support.” “In the government they are proceeding on the fact that this is the responsible decision to preserve Privatbank, and the entire banking system.”

On October 16 Ukrainian media reported that the businessman Igor Kolomoisky and other shareholders have agreed to transfer Privatbank to the government after December 20. It was noted that the NBU forced the nationalization process, with the support of the presidential administration and the International Monetary Fund. At the same time Prime Minister Vladimir Groisman spoke against such a scenario, in connection with which the nationalization of the bank by the end of 2016 was called into question.

Prior to that, in October, it was reported that Privatbank, if it did not comply with a program of recapitalization, could be subject to nationalization. Then the plans of the Cabinet to complete the process within two weeks became known.

In August, the Pechersk Regional Court in Kiev accused officials of Privatbank of embezzling 19 billion hryvnia (about 765 million dollars) which had been allocated to refinancing.

Last year, the German periodical Deutsche Wirtschafts Nachrichten suggested that Kolomoisky could arrogate part of the IMF’s financial assistance aimed for the development of the Ukrainian economy.

Privatbank is the largest Ukrainian commercial credit institution. The bank serves 22 million customers.

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