The IMF was interested in two key points in the compromise draft law on the non-return of nationalized banks to their former owners, which would make it impossible for PrivatBank to return to businessman Igor Kolomoisky: stated the source of Economic Truth.
Ukraine and the International Monetary Fund agreed on the parameters of the new draft law, which prohibits the return of nationalized banks to their former owners, writes “Economic truth” with reference to the negotiators.
The interlocutors of the publication note that in case of prompt adoption of the document, the IMF can quickly approve the allocation of increased assistance to Ukraine. At the first stage, Kiev can receive about $ 4 billion, of which $ 2–2.5 billion is the tranche from the Fund, the second part from the EU, the World Bank and other donors.
Negotiators to agree on a compromise version of the document told Economic Truth that the Fund’s representatives “wanted [получить] maximum guarantees that banks will not return [бывшим] “the owners and IMF funds (indirectly) will not fall into the hands of oligarchs when the state pays compensation for illegal nationalization.”
A compromise bill, which, according to a source in the government, was even tougher at some points than the previous one, was submitted to the Verkhovna Rada on March 24. According to the EP, this draft can be considered at one of the next parliamentary sessions – possibly at an extraordinary session on Saturday, March 28.
“The project now has more procedural guarantees that banks will not return to their previous owners. Shareholders will only be entitled to compensation in cash,” a government source said.
A representative of the National Bank, on condition of anonymity, told the publication that the IMF’s main requirements were two points: “That the bank is not returned to the ownership of ex-shareholders, and that compensation is possible if it is calculated only in a certain way, and not otherwise.”
The interlocutor specified that “in the previous version of the bill, it was said that only losses are compensated.” “Now the compensation applies to lost profits as well as moral damage. Thus, the violation of the Constitution is eliminated, on the basis of which the bill could be appealed,” he said.
Several important changes are introduced into the procedure for establishing the amount of damage and payment of compensation: firstly, it is established that the damage caused can only be compensated in cash (thus eliminating the possibility of the bank returning to ex-owners); secondly, courts can consider decisions of state bodies on nationalization or withdrawal of banks from the market only in terms of compliance with the procedure, but cannot question the assessments and expertise of specialized regulators (NBU, Ministry of Finance or the National Commission for Securities and Stock Markets).
The size of the “real damage” to the former owners will be determined by an international audit firm.
In addition, the bill establishes that appealing against decisions of the National Bank and other bodies does not stop their action: if the bank is declared insolvent, it will remain so. Recognition of the decision of the NBU as unlawful does not restore the state and legal status of the bank, which “will not allow” zombie banks to “return or claim to return to the market.”
Before the bill is submitted to parliament, it and alternative bills should consider the relevant committee of the Rada. As noted by the EP, at the moment there is no information about when the committee meeting may take place.
PrivatBank was nationalized in December 2016, at that time it was the largest private bank in Ukraine. Before nationalization, the financial institution was declared insolvent. The state spent almost 200 billion UAH on its capitalization. Former shareholders, businessmen Igor Kolomoisky and Gennady Bogolyubov, in court are trying to achieve the abolition of nationalization and the return of the bank.
In November 2019, Kolomoisky announced that the bank would be returned to him in the near future. Before that, he said that he did not need PrivatBank, he wanted $ 2 billion in compensation.
In February 2020, the head of the board of PrivatBank, Peter Krumkhanzl, stated that there was a “real risk” of the bank returning to its former owners.
President of Ukraine Volodymyr Zelensky, who was a business partner of Kolomoisky before being elected head of state, argued that in the PrivatBank issue “he will protect only the interests of the state.”