Page 15 - bne IntelliNews 26th May

Eastern Europe
May 26, 2017 www.intellinews.com I Page 15
Ukrainian prosecutors raid ex-PrivatBank execs and firms suspected of €9bn fraud
bne IntelliNews
The Ukrainian Prosecutor General’s Office
(PGO) has conducted raids at the homes of former officials of PrivatBank, which was nationalised in December, as well as the offices of related parties suspected of a UAH267bn (€9bn) fraud.
The main investigative department of the PGO is conducting a pre-trial investigation of possible embezzlement by PrivatBank’s former manage- ment, according to a statement released on May 24. No persons affected were named.
Prosecutors believe the country’s largest bank provided multi-billion credits to related parties
in 2008-2016, including at the expense of refi- nancing funds obtained earlier from the National Bank of Ukraine (NBU). bne IntelliNews inves- tigations ahead of the bank’s nationalisation in December 2016 found that a massive 97% of the bank’s loans had been made to shell and related-
party companies that were believed to be owned or controlled by the bank’s oligarch owners. When the government announced the nationalisation of PrivatBank after it had failed to fulfill a three-year recapitalisation plan, the bank was found to have a UAH148bn (€5.1bn) hole in its balance sheet as of early December, which at the time was said to be almost entirely due to related-party financing.
On April 10, then NBU governor Valeriya Gontar- eva, who left office on May 10, told journalists that the post-nationalisation audit of the bank found that not 97% but 100% of the corporate portfolio was issued to related parties. Privatbank’s former owners Ihor Kolomoisky and Hennady Boholyubov have consistently denied any wrongdoing.
To cover the capital shortfall, the Ukrainian gov- ernment injected capital of UAH117bn (€4.1bn) and bailed-in PrivatBank’s non-deposit unsecured
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March 31, 2017 www.intellinews.com
Bulgaria’s kingmaker parties to hold GERB
to ransom
bne IntelliNews
The centre-right Citizens for European Develop- ment of Bulgaria (GERB) might have won the snap parliamentary elections held on March 26, but the party is heading for tough negotiations with possible partners to gain a large enough majority to form a government, and will most likely be forced to make big compromises to stay in power.
Central Europe starts to tot up Brexit fallout
bne IntelliNews
Central European states expressed regret that the UK is leaving the EU as London triggered the Ar- ticle 50 withdrawal clause on March 29. They also quickly moved to start totting up the direct costs.
The economic effects of Brexit on Central Eu- rope are hard to pinpoint given the wide range of
Two smaller groups in the parliament – the na- tionalist United Patriots coalition and the populist Volya (Will) party – have already said they will pre- sent a united front in talks with GERB. They have also indicated they are willing to work with the Bulgarian Socialist Party (BSP), the runner-up in
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TmhaejoVrispeogwreardsr.egion will be hard hit by the loss of their closest ally amongst the bloc's
potential scenarios under which the UK will exit. However, most suggest the damage will be limited by modest direct trade ties.
In political terms, the Visegrad region will be
See page 3