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bne July 2020 Eastern Europe I 45
the prosecutor of the Kyiv Office of the Prosecutor's Office, Andriy Stolyarchuk, on June 10.
“What we are constantly faced with, and it is an everyday battle, is attacks by [the former owners] which [are being] carried out through the ginormous
and unprecedented number of legal cases – hundreds – which take the same claim and file it in various iterations and in various jurisdictions. It makes
it very complicated to co-ordinate. It confuses the courts and confuses the judges. It makes it very difficult for us to respond effectively,” said Sharon Easky, an independent director on the board
of PrivatBank in an exclusive interview with bne IntelliNews.
“This particular decision appears to be one that is being pushed by the former [owners] through a specific court. It
is not the primary court. And we find this entire parallel process to be an intentional way to obstruct the primary litigation to the related party decision and the related parties,” Easky added.
She went on to say that the court ordered PrivatBank to pay out to the related parties but that the court's decisions are “questionable” and “not consistent” with “standards of law and is actually quite orchestrated.”
PrivatBank’s press service said the same day that the documents from the general prosecutor were drawn up with numerous procedural violations and dated "retroactively" on May 27 with a demand to appear at the prosecutor’s office on June 5, 2020.
"PrivatBank regards the interrogation
of the management of PrivatBank on the facts of non-performance of dubious enforcement proceedings as another attempt to put pressure on the bank
by persons associated with its former owners," the bank said in a press release.
At issue is a decision by the Kyiv Court
of Appeal dated April 15, in case No. 757/7499/17-ts on recovering more than $250mn from PrivatBank in favour of offshore companies associated with the Surkis family, that decided in their favour.
PrivatBank complained that the claims are illegitimate, but these complaints were ignored by the Pechersky District Court of Kyiv, and the corresponding appeal to the Ministry of Justice remains unanswered, said the bank.
PrivatBank has also appealed to the state executive service requesting the return of executive documents on the applications of six companies associated with the Surkis brothers, while the bank claims there are circumstances suggesting that some of the documents used to bring the case were forged – a request that has not yet been satisfied.
Easky said that the bank remains in a “very difficult situation,” but that it is sticking to its guns and will not pay out until there are legitimate claims that are upheld by legitimate court rulings.
“We expect we will get through it. But the important part of this is: we know the Surkis claim is all related parties and that the initial bail-in by the bank was correct. We understand that these
The oligarch run-around
Without saying so explicitly, the bind that PrivatBank finds itself in is that the oligarchs, with their billions of dollars of resources operating in a country with the second-lowest average income in Europe, have effectively captured the judicial system.
Efforts to root out corruption in the legal system have got nowhere and judges and judgements remain for sale. To highlight the issue, a few days after the interview the National Anti-Corruption Bureau of Ukraine (NABU) confiscated several plastic bags containing $6mn in cash that was meant as a bribe for senior offices of NABU and Specialised Anti- Corruption Prosecutor’s Office (SAPO) to bury once and for all an investigation into the embezzlement schemes of Viktor Yanukovych-era ecology minister Mykola Zlochevsky – the biggest bribe every recorded in Ukraine.
The money was supposed to wipe the slate of the founder of Burisma Holdings clean, the scandal-ridden company
“What we are constantly faced with is attacks by the former owners which are being carried out through the ginormous and unprecedented number of legal cases”
challenges in Ukraine were always going to be difficult to overcome because
of the fact that the courts appear to
be aligned against us on this matter, notwithstanding the facts. But that said, we are prepared to pay out as [and] when we feel it is a legitimate court and a legitimate process. Today we don't think this is what it is,” said Easky.
Another hearing on the case was scheduled for June 15 by the Grand Chamber of the Supreme Court. As bne IntelliNews went to press there were reports coming out that the Supreme Court had overturned the lower court's decision and annulled the order to repay the $250mn, which, if confirmed, would be another major victory for the bank in its fight against Kolomoisky.
that briefly employed Hunter Biden, the son of the former US vice-president and US presidential election Democrat challenger Joe Biden.
The scandal highlights the widespread use of bribery to interfere with investigations and law enforcement in Ukraine.
The irony is that usually foreign companies are the victims of the venal state of the Ukrainian legal system, as they have to subscribe to nominal rule of law and pretend the rulings of the court are legitimate. The oligarchs face no such constraints and will only abide by legal decisions if they go in their favour. Judicial decisions can be weaponised in corporate disputes and they can keep
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