Ukrainian oligarch Igor Kolomoisky was once considered one of the most powerful people in Ukraine. Credit: EPA/Mikhailo Markiv
Two oligarchs accused of looting nearly $2bn (£1.6bn) from Ukraine's biggest bank are set to launch their High Court case in London as President Volodymyr Zelenskiy fights to stamp out decades of corruption.
Privatbank has accused its former oligarch owners, Ukrainian billionaires Igor Kolomoisky and Gennady Bogolyubov, of using fictitious loans and shell companies to orchestrate and cover up one of the largest banking frauds in Europe.
A money-laundering scandal is alleged to have led to the nationalization of PrivatBank in 2016 after the National Bank of Ukraine found a $5.5 billion hole in a commercial lender's balance sheet.
A long-awaited four-month legal battle begins on day one . -a year behind schedule, after the Supreme Court adjourned the trial shortly after Russia's invasion of Ukraine.
This is a key litmus test for President Zelenskiy, not least because a win could lead to a hefty cash salary- tied Ukraine.
Privatbank is seeking to recover $1.9 billion in damages plus $4.2 billion in interest, meaning any funds returned to the state-owned bank could ultimately go towards defeating Vladimir Putin or helping to rebuild a torn country's war.
< p>According to a joint estimate by the World Bank, the United Nations, the European Commission and the government of Ukraine, the cost of reconstructing and rebuilding Ukraine has risen to $411 billion in the year since the Russian invasion in February 2022. /p>
The report says Ukraine will need at least $14 billion in critical investment in 2023 alone, $11 billion more than its government budgeted for this year.
Ukrainian President Volodymyr Zelensky has pledged to fight corruption. Photo: DUMITRU DORU/EPA-EFE/Shutterstock
Two companies formerly controlled by Mr. Kolomoisky were among five strategic enterprises seized by the Ukrainian government last November.
This followed a new wave of anti-corruption measures, which saw President Zelenskiy also fire several government ministers. amid allegations of wartime bribery.
The PrivatBank case will also look at how oligarchs allegedly used London to launder dirty money as the post-invasion UK economic crimes bill crawls through parliament.
< p>The case concerns three UK-registered suppliers that Kolomoisky and Bogolyubov allegedly used to extract funds through bizarre supply agreements, including for 126,000 tons of apple juice concentrate and 2.4 million tons of Australian manganese ore.Mr Bogolyubov has warned English courts that a fraud lawsuit threatens to wipe out his fortune, including his £62m London mansion in Belgrave Square.
Mr. Kolomoisky denies any wrongdoing. A statement provided by his lawyers for the city's firm Fieldfisher said: “The lawsuit is part of a politically motivated campaign against him that began with the wrongful expropriation of the Bank from him and his fellow shareholders.”
“He is confident that it will be determined that the Bank did not actually suffer any loss in respect of the transactions it complains about.”
George Maling of Enyo Law, representing Mr. Bogolyubov, said: “Mr. Bogolyubov completely denies the allegations. Despite years of intense investigations and the disclosure of millions of documents, PrivatBank has provided absolutely no evidence that Mr. Bogolyubov was aware of, much less directed or benefited from, any such alleged activity.
“PrivatBank’s allegations, which are based on nothing more than unsubstantiated conclusions, are legally and factually erroneous.”
A statement provided by PrivatBank’s lawyers says: “The Bank has always been confident in the strength of its claims and that he will succeed in proving that he has been the victim of fraud on a massive scale”
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