Oligarch Ihor Kolomoiskyi, a prominent figure in Ukrainian politics and business, has found himself at the centre of a significant legal controversy. He has officially been notified of suspicions related to the alleged embezzlement of a staggering UAH 9.2 billion from PrivatBank, one of Ukraine’s largest financial institutions. These suspicions have been formally announced by two key authorities: the National Anti-Corruption Bureau and the Specialized Anti-Corruption Prosecutor’s Office.
Scheme Involving Oligarch Ihor Kolomoiskyi Suspected
The investigation into this complex case has revealed a convoluted scheme in which Ihor Kolomoiskyi, who at the time served as the head of the Dnipropetrovsk Regional State Administration and was the ultimate beneficiary of PrivatBank, played a central role. This scheme unfolded during the period of January to March 2015 and had two primary objectives:
- Diverting Privat Bank’s Funds: The first objective of this scheme was to divert Privat Bank’s funds. This was achieved through a series of orchestrated transactions that compelled the bank to disburse over UAH 9.2 billion to a controlled offshore company. These disbursements were ostensibly for the repurchase of the company’s own bonds but at an inflated cost.
- Increasing Kolomoiskyi’s Stake: The second objective was to increase Kolomoiskyi’s stake in the bank’s authorised capital. This move aimed to consolidate his control over the bank further.
Disclosure of the Misappropriation Scheme
The National Anti-Corruption Bureau has been instrumental in revealing the intricate details of how PrivatBank’s funds were misappropriated. A substantial portion of the embezzled sum, more than $446 million, was subsequently transferred to the accounts of three related legal entities. These transactions were disguised as purchases and sales of securities, a deliberate attempt to facilitate money laundering.
These laundered funds eventually found their way into the personal account of PrivatBank’s ultimate beneficiary, Ihor Kolomoiskyi himself. Kolomoiskyi had the freedom to utilise these funds at his discretion, which notably included contributing to the bank’s authorized capital, thereby appearing to meet the National Bank’s requirements.
Additional Suspects in the Case
Beyond Ihor Kolomoiskyi, several other individuals have been implicated as additional suspects in this intricate case. Their roles in the alleged scheme are as follows:
- The Former Chairman of PrivatBank’s Board: This individual played a significant role within the bank’s hierarchy.
- The Deputy Head of the Department: This person also served as the director of the bank’s interbank dealing department and acted as an authorised representative of a non-resident company linked to the bank.
- The Deputy Chairman of the Bank Board: Holding the position of director of the Treasury, this individual was responsible for overseeing critical financial operations.
- The Head of the Department for Supporting Interbank Operations is responsible for managing interbank operations within the bank’s treasury.
- The Deputy Head of the Department for Maintenance of LORO Accounts of Correspondent Banks: This individual oversaw non-resident accounts at the head office of Privat Bank.
It is noteworthy that, at the time of this report, the National Anti-Corruption Bureau has chosen not to disclose the names of these additional suspects.
Progress in the Investigation
This incident marks the fourth episode in an ongoing investigation into the misappropriation of PrivatBank’s funds, as confirmed by the bureau. The preceding three episodes, which also involve allegations of misappropriation, have seen significant progress in recent months. In October of the previous year, the National Anti-Corruption Bureau and the Specialized Anti-Corruption Prosecutor’s Office acknowledged that detectives had amassed sufficient evidence to establish the guilt of suspects in these episodes. This led to the formal opening of the investigation materials. On September 6, the indictment related to these earlier episodes was submitted to the court, marking a crucial step in the legal process.
Previous Misappropriation Cases
Before this latest UAH 9.2 billion case, there were several previous instances of alleged misappropriation connected to PrivatBank:
- UAH 136 Million Insurance Payment Scheme: Initially, there were suspicions that over UAH 136 million had been embezzled from the bank through an insurance payment scheme.
- Embezzlement of Nearly $315 Million (Approximately UAH 8.2 Billion): Subsequently, new suspicions emerged regarding another episode, which involved the embezzlement of nearly $315 million, roughly equivalent to UAH 8.2 billion.
- UAH 2 Million Embezzlement: In September 2022, the list of crimes attributed to former PrivatBank managers expanded once again. This time, it involved the alleged embezzlement of a comparatively smaller sum, UAH 2 million.
In conclusion, the suspicions surrounding Ihor Kolomoiskyi and others in the alleged embezzlement of UAH 9.2 billion from PrivatBank represent a significant development in an ongoing investigation into financial misconduct within one of Ukraine’s largest financial institutions. With the formal announcement of these suspicions by the National Anti-Corruption Bureau and the Specialised Anti-Corruption Prosecutor’s Office, the legal process is now underway, following several previous episodes of alleged misappropriation within the bank. The outcome of this investigation will undoubtedly have far-reaching implications for both the individuals involved and the broader financial landscape in Ukraine.