PrivatBank’s $4.2 billion London lawsuit against ex-owners begins

PrivatBank’s $4.2 billion lawsuit against its former owners began in a London court on Monday, with Ukraine’s largest lender accusing them of “fraud on an epic scale” which pushed the bank towards nationalisation.

Ihor Kolomoisky and Gennadiy Bogolyubov are being sued for allegedly misappropriating nearly $2 billion through “sham” loans and supply agreements between 2013 and 2014.

PrivatBank, which is seeking about $4.2 billion including interest, has pursued Kolomoisky and Bogolyubov in the English courts since 2017, the year after it was nationalised as part of a clean-up of Ukraine’s finance system.

Kolomoisky and Bogolyubov both deny any wrongdoing and say there was no misappropriation from PrivatBank. They also argue that PrivatBank has no evidence they had any knowledge of or involvement in any misappropriation.

But PrivatBank’s lawyers told the High Court in London on Monday – the first day of a trial which is expected to take 14 weeks – that the pair are not giving evidence in their defence because they have no answer to the fraud allegations.

“Mr Kolomoisky and Mr Bogolyubov have absented themselves and their associates from this trial because they know perfectly well that if they had attended to give evidence, any explanations … would have been exposed as incredible,” PrivatBank’s lawyer Andrew Hunter said.

“They would have been revealed to be the people the bank say they really are, and that is fraudsters, money launderers and liars.”

Kolomoisky’s lawyer Mark Howard said in court filings that PrivatBank’s case is bound to fail because the loans at the centre of the lawsuit have almost entirely been repaid.

“The bank has simply not suffered the loss for which it claims damages,” he added.

Bogolyubov’s lawyer Clare Montgomery argued in court filings that “no funds were in fact misappropriated from the bank”.

She said it was “implausible” that Bogolyubov knew about the alleged misappropriation when there was no direct evidence.