Kiev, Ukraine. These days in Ukraine, corruption is so widespread you likely have to bribe the front desk for your own motel room key. But the winds may be changing as the state turns on some of its most famous oligarchs in recent events.


The former owners of Ukraine’s PrivatBank, oligarchs Ihor Kolomoisky and Hennady Boholyubov, were responsible for more than €561 million Euros in fraudulent transactions performed the “last night” before the lender’s nationalisation last December, National Bank of Ukraine governor Valeriya Gontareva alleged today.


In December, the Poroshenko government announced the nationalisation of PrivatBank after it failed to fulfill a three-year recapitalisation plan. The bank was found to have a €5.1 Billion Euro gap in its balance sheet as of early December, at the time said to be almost entirely due to related party financing. Privatbank’s owners have always denied any wrongdoing, meanwhile it’s former owners have left the Ukraine to avoid potential prosecution pending.


National Bank President (equal to US Federal Reserve Chairman) Gontareva also told a news briefing that the post-nationalisation audit of the bank established that 100% of the corporate portfolio was issued to related parties. “The necessity to additionally capitalise is more and the state would have to pay more money for the management of the bank by this team of oligarchs and managers,” Interfax news agency quoted Gontareva as saying.


To cover the capital shortfall the Ukrainian government injected capital of €4.1 Billion Euros and bailed out PrivatBank’s non-deposit unsecured creditors for the amount of $1.1 Billion Dollars, including bondholders for the amount of $595 Million Dollars, resulting in one of the biggest embezzlements in modern history.


Ukraine has the worst corruption of any country in eastern or western Europe. It has been warned multiple times to end the problem or face a withdrawl of future funding from the IMF, US Treasury, European Union, and United Nations. It’s President Petro Poroshenko is currently under investigation by the US FBI and Kiev anti corruption agents for his involvement in this crime and similar fraud cases.




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