You're reading: Court case on legality of PrivatBank nationalization delayed until May 7

A court hearing on the legality of the nationalization of Ukraine’s largest bank, PrivatBank, has been postponed.

The Kyiv Economic Court was initially supposed to hold the hearing on April 16, but then delayed it until May 7.

The lawsuit against the Ukrainian government was submitted by oligarch Ihor Kolomoisky – one of the former owners of the bank – and Triantal Investments Ltd, a company in which Kolomoisky allegedly has a 16.5-percent stake.

Kolomoisky initially filed a lawsuit against the Ukrainian government during the summer of 2017, half a year after the government nationalized the bank in December 2016. The oligarch wanted to regain control over what he claimed to be $2 billion worth of capital.

However, the plaintiffs submitted amendments to their complaints on April 9 in order to expand the list of claims. The changes were accepted by the court.

PrivatBank is Ukraine’s largest bank in terms of capitalization and client base. In 2016, it failed a stress test that provoked the government to conclude that the bank was on the verge of insolvency.

PrivatBank’s new management hired Kroll, a New York-based consulting firm, to conduct a forensic audit. In 2018, it uncovered a “large-scale and coordinated fraud” scheme that emptied $5.5 billion from the bank’s vaults, the NBU said in a statement.

Back in November, a High Court judge in London ruled that it did not have jurisdiction in a lawsuit submitted by PrivatBank’s current owner – the Ukrainian state – to recover billions of dollars it claims were embezzled by the Kolomoisky and his business partner, Gennadiy Boholyubov. PrivatBank is appealing the ruling.

Ukraine’s central bank also filed a lawsuit against Kolomoisky in Switzerland in December 2018, demanding that the oligarch repay Hr 6.64 billion ($238 million).

Kolomoisky faces more legal problems in Ukraine: Kyiv’s Pechersk District Court recently ordered the seizure of assets belonging to a number of companies connected to the oligarch.

The order was issued under a criminal case opened earlier over the embezzlement of over Hr 19 billion ($700 million) in refinancing funds issued to PrivatBank by the NBU.

Read more: PrivatBank’s $3-billion lawsuit against PwC