Ukraine’s largest bank has accused its previous owners of large-scale fraud at a trial taking place at London High Court this week.
JSC Commercial Bank Privatbank – known as “Privatbank” – is suing Ihor Kolomoisky and Gennadiy Bogolyubov for US$4.2bn in reparations, accusing the two of orchestrating fake loans and supply agreements between 2013 and 2014.
In a written case outline, Privatbank’s legal representation said: “This case concerns fraud on an epic scale, covered up by money laundering on a vast scale.”
Privatbank claims the fraud contributed to the bank’s collapse and nationalisation in 2016. The investigation that followed its collapse was how the alleged fraud was uncovered, say the bank’s representatives. “That fraud – referred to in these proceedings as the ‘misappropriation’ – concerned the extraction of more than US$1.9bn from the bank, using a complex network of vehicles,” they said.
Ihor Kolomoisky is understood to be residing in Ukraine, but Gennadiy Bogolyubov has been living in London for the past 10 years, hence the case being brought in London’s High Court.
Kolomoisky’s lawyers say the dispute is Ukrainian, and deny any wrongdoing.
Bogolyubov’s representatives told the judge at the hearing this week that the bank’s claims are “misconceived” and that it lacks direct evidence implicating Bogolyubov in the alleged fraud. In their written case outline, they said: “The bank’s case is no more than an assumption that Mr Bogolyubov must have been involved when his conduct is viewed through English eyes and the prism of English commercial principles and practices. This is not a legitimate way in which to judge this Ukrainian case.”
When the bank was nationalised in December 2016, it was used by 20 million Ukrainians including 3.2 million pensioners, more than half a million students and “1.6 million socially vulnerable households,” according to BBC news.
Neither of the accused appeared in court. The case is expected to last several months.
