National Bank of Ukraine accuses oligarch Kolomoisky by name of attacks and intimidations

National Bank of Ukraine accuses oligarch Kolomoisky by name of attacks and intimidations
For the first time the NBU called out Kolomoisky by name for orchestrating a campaign of attacks and intimidation on its staff and independence
By bne IntelliNews November 28, 2019

Ukraine’s National Bank of Ukraine (NBU) for the first time directly accused oligarch Ihor Kolomoisky for orchestrating a sustain campaign of physical attacks and “terror” intimidations against the bank’s current and former staff.

In a statement released to the press and Ukraine’s partners the NBU claims Kolomoisky has orchestrated a campaign with the aim "to create a chaos of information in order to discredit the NBU and reform the banking sector, change [its] leadership".

In the most outspoken criticism yet by a official organ the NBU is calling on the international community to support the bank and force Zelenskiy to act.

 Over the past few weeks, the NBU has been "besieged by speculations and slander in the media, paid rallies in front of the NBU building, and even attempt by hired thugs to forcibly invade it", according to the central bank's statement published on November 27.

“The NBU believes that this pressure on the NBU comes from Kolomoiskyi, an oligarch and former owner of the nation's largest lender PrivatBank,” the bank said, naming the oligarch for the first time in an official statement.

Separately in London former NBU governor Valeriya Gontareva gave a speech at the London School of Economics (LSE) where she now works also accusing Kolomoisky of violence and called on Ukrainian president Volodymyr Zelenskiy to break with the oligarch who bankrolled part of his election campaign in April and lent his media to the cause.

Gontareva was hospitalised after a hit and run attack on a pedestrian crossing in London that police are treating as suspicious and Gontareva’s house was burnt down in an arson attack on September 16.

"Kolomoisky intimidates not only me, not just the reformers, but the entire population of Ukraine .... The international community should send a strong signal about who the real devil is on Ukrainian territory," Gontareva said.

The NBU has branded attacks on its staff and Gontareva has a “terror” campaign. But now the NBU is going a step further.

Kolomoisky is close to Ukrainian president Volodymyr Zelenskiy who has undermined confidence with his reluctance to curb Kolomoisky open attacks on the NBU and its staff in the press and his ongoing legal campaign to win back control of Privatbank through the courts. The resulting uncertainty has lead to the IMF to suspend talks on a new Extended Fund Facility (EFF) deal and another team left Kyiv last week without closing a deal. The IMF has called for the government to make clear its stance over the possible denationalisation of Pirvatbank and to ensure the independence of the NBU. Moreover the IMF has also demanded that government attempt to recover some $15bn stolen by bank owners, include the $7.6bn stolen by Kolomoisky from his bank. According to the regulator, the businessman owes the state $5.5bn "he siphoned off from PrivatBank" before it was nationalised in late 2016. Kolomoisky, in turn, rejects any wrongdoing.

"The purpose of the assault on the NBU is to create a chaos of information in order to discredit the NBU and reform the banking sector, change leadership, and resort to the manual management of the NBU in the future; to avoid responsibility and obligation to return money siphoned off from PrivatBank; to interfere with Ukraine’s cooperation with international partners and, above all, the IMF, which supports the state’s position that former owners of bankrupt banks must repay what they owe the state," the statement reads.

According to the regulator, the information campaign is "a paid-for action" and Kolomoisky has been behind it.

Specifically, protestors in front of NBU this week, who broke into the lobby, are paid to take part in protests. The organiser of the event is an NGO called Stop Corruption that was expelled from the Global Investigative Journalism Network (GIJN) based on lack of professionalism and a conflict of interest, the NBU added.

On November 25, employees of the Nikopol Ferroalloy Plant and other companies controlled by Kolomoisky joined the protests, who previously held a rally outside the PrivatBank offices in Dnipro and Kyiv, the NBU emphasised. "Third, this attack is carried out through the main driver, MP Oleksandr Dubinskyi, who has been under investigation for corruption and known in media as the mouthpiece of oligarch Kolomoisky".

Earlier this year, Ukraine’s Supreme Court overturned the ruling by lower courts to de-nationalise the bank and return it to its former owners.

In April, ex-owner Kolomoisky said that he is going to seek $2bn of compensation from the nation's government. "I don't need [to get back] PrivatBank. But there was $2bn in capital there. Let them [the Ukrainian government] return it to me and there will be no problems," Kolomoisky said in an interview with the Ekonomichna Pravda online outlet.

On October 15, the Court of Appeal of England and Wales, granted the appeal of PrivatBank against December's ruling of the court of first instance on the discrepancy between the jurisdiction of the financial institution's claim against the ex-owners.

"The court has given judgment confirming that the English court has jurisdiction to hear PrivatBank's fraud and conspiracy claims against its former shareholders, Kolomoisky Boholiubov. The worldwide freezing order, which has been in place since December 2017, will continue until judgment after trial.

The NBU statement may prove to be a seminal moment in Ukrainian politics as it has appealed to the international community to protect itself as it has not had the support of the government and the president remains largely mute on the issue of Kolomoisky.

Below is the full statement by the NBU.

Statement from the NBU Board: Ihor Kolomoisky is the cause of the recent pressure and attacks on the bank

Dear citizens and representatives of the media, the expert and business community, and international organizations! Over the past few weeks, the NBU has been besieged by speculations and slander in the media, paid rallies in front of the NBU building, and even attempt by hired thugs to forcibly invade it.

We believe that this pressure on the NBU comes from Ihor Kolomoiskyi, an oligarch and PrivatBank’s former owner who owes the state USD 5.5 billion he siphoned off from PrivatBank before it was nationalized. At the same time, the state – the president, the government, and the NBU – stand united in the call on the debtor to repay these funds.

The purpose of the assault on the NBU is to create a chaos of information in order to: discredit the NBU and reform the banking sector, change leadership, and resort to the manual management of the NBU in the future avoid responsibility and obligation to return money siphoned off from PrivatBank interfere with Ukraine’s cooperation with international partners and, above all, the IMF, which supports the state’s position that former owners of bankrupt banks must repay what they owe the state.

The facts listed below prove that the information campaign is a paid-for action and Ihor Kolomoiskyi has been behind it.

First, protestors at the walls of the NBU, according to the media reports, are paid to take part in protests. The organizer of the mentioned public events is an NGO called Stop Corruption that was expelled from the Global Investigative Journalism Network (GIJN) based on lack of professionalism and a conflict of interest.

Second, on 25 November employees of the Nikopol Ferroalloy Plant and other companies controlled by Ihor Kolomoiskyi joined the protests, who previously held a rally outside the PrivatBank offices in Dnipro and Kyiv.

Third, this attack is carried out through the main driver, MP Oleksandr Dubinskyi, who has been under investigation for corruption and known in media as the mouthpiece of oligarch Kolomoiskyi. Negative statements and slander, demands and expectations of the protesting parties are vocalized by the information sources owned or associated with Dubinskyi.

Exerting pressure on the central bank is unacceptable in a legal and civilized state. We continue to work to ensure price and financial stability – we regulate banks, provide continuous payments, accumulate international reserves of Ukraine etc. However, since such attacks may threaten the streamlined operation of the regulator and the safety of our employees, the NBU has referred to the law enforcement requesting prevention of illegal actions.

Despite the pressure we continue to stand by the joint premise: the former owners of banks should take responsibility for siphoning off customer deposits and leading banks to bankruptcy.

We urge the media and expert community to support the NBU through non-biased coverage of events.

 

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