Hiring experts to help with PrivatBank, Ukraine’s largest bank, may be the undoing of some National Bank of Ukraine staffers.

A document from the Prosecutor General’s Office seen by the Kyiv Post shows that a criminal case is under way against the first deputy governor of the NBU, Kateryna Rozhkova, as well as multiple staff members who had worked on the investigation and 2016 nationalization of PrivatBank. They weren’t charged yet.

They are facing potential charges of treason and embezzlement. The reason? NBU shared information with companies including forensic company Kroll Inc., consulting firm AlixPartners and law firms Hogan Lovells and Asters.

All of the above are companies that Ukraine had officially hired to investigate or help nationalize PrivatBank, which had $5.5 billion missing at the time of nationalization in 2016. Its former owners, Ihor Kolomoisky and Hennady Bogolyubov, allegedly embezzled money from the bank with fraudulent loans and money laundering.

Kroll’s work was integral in exposing the damage and AlixPartners was tapped to prepare the bank for nationalization. 

Kolomoisky and Bogolyubov deny embezzlement accusations and are challenging the privatization of PrivatBank in courts.

Rozhkova told the Kyiv Post that she’s not aware of any pending charges against her but that attacks against the NBU’s cooperation with the foreign companies are nothing new.

“This is just surreal,” she wrote in a text message.

“Kolomoisky constantly kept trying to gain access to the investigation in different ways,” said Andrii Ianitsky, a journalist who investigated PrivatBank and wrote a book about it. “They struck at the NBU to make it stop working with these companies, tried to publicly discredit this cooperation, saying that it was expensive, that we don’t know where the money goes.”

Indeed, Kolomoisky has tried multiple times to disrupt state cooperation with the foreign companies using legal motions and PR campaigns. The cooperation has been sporadically investigated by state bodies, including the National Anti-Corruption Bureau of Ukraine in 2019, followed by the State Bureau of Investigation. To date, nothing has come of it.

Kyiv Post sources who weren’t authorized to talk to the media said that the investigation has been revived either by the current head of the national bank, Governor Kyrylo Shevchenko, or someone in President Volodymyr Zelensky’s office, and is being conducted by the Security Service of Ukraine and the State Bureau of Investigation.

The NBU responded that it will continue to defend the privatization of PrivatBank and that all its interactions with law enforcement officials are lawful. However, the central bank’s statement was referring to Kolomoisky’s alleged fraud and not the investigation of Rozhkova.

“The NBU calls on the media to refrain from disseminating unconfirmed information about illegal withdrawal of funds from PrivatBank until receiving official comment from law enforcement agencies,” the bank wrote in an email.

The anti-corruption bureau declined to comment. The security service said that it may comment at a later date. Zelensky’s office, and bureau of investigation did not respond by publication time.

The most recent drive to investigate the NBU’s cooperation with the foreign companies came out of Zelensky’s office, the sources said. 

The sources added that this may be yet another attempt to get rid of Rozhkova, who is at odds with Shevchenko. The governor had voted to reprimand her after she spoke with the Kyiv Post. He has also stripped Rozhkova of her banking oversight role. Later, Rozhkova said he tried to censor her interview with Ukrainian magazine Novoye Vremya.

The NBU has denied trying to censor the first deputy governor.

Rozhkova was part of the team of a previous governor, Valeria Gontareva, who served from 2014-2017 and under whose watch PrivatBank was nationalized.

After Gontareva left, her deputy Yakiv Smolii became governor, until he resigned in June 2020, saying that Zelensky’s office put political pressure on him. Since then, most of his team resigned as well. Some former staff told the Kyiv Post that they also felt pressure from the new leadership and the NBU Council, the central bank’s controversial advisory body.

Multiple experts and banking insiders had said that new central bank governor Shevchenko has a more autocratic leadership style and is less independent than Smolii. However, many also praised him as a professional banker who knows what he’s doing.

NBU independence is a major priority for macroeconomic stability and future cooperation with the International Monetary Fund, which has recently declared that Ukraine must do more to receive its next $700 million loan tranche. The shake-up at the NBU likely contributed to the IMF’s caution, as seen from its many statements calling for the central bank’s independence.

In the meantime, Rozhkova’s fate may depend on what the security service, the investigation bureau and the prosecutor general make of the NBU’s cooperation with foreign firms.

The investigation and nationalization of PrivatBank involved a colossal amount of work. While the NBU had access to a great deal of the inside information that would expose fraud inside PrivatBank, it needed external help to crunch the numbers and prepare a successful legal case.

Kroll had access to information from the U.S. Department of Treasury, as well as the tools to analyze the huge volume of automated transactions involved in the PrivatBank fraud scheme, Ianitsky said.

The companies also helped Ukraine prepare for the all-important lawsuits against Kolomoisky and Bogolyubov in the High Court of London. 

Kyiv Post staff writer Anna Myroniuk contributed to this story.

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