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Oligarch Kolomoisky charged with embezzling $250 million from PrivatBank

by Martin Fornusek and The Kyiv Independent news desk September 7, 2023 4:07 PM 2 min read
Ukrainian business tycoon and one of Ukraine's most famous billionaires, Ihor Kolomoisky, was arrested with the right to post bail in the amount of half a billion hryvnias after being suspected of fraud at a court hearing in Kyiv on Sept. 2, 2023. (Photo by Maxym Marusenko/NurPhoto via Getty Images)
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The former PrivatBank owner Ihor Kolomoisky, together with five associates, has been charged by the National Anti-Corruption Bureau of Ukraine (NABU) with embezzling Hr 9.2 billion ($250 million) from PrivatBank, the NABU announced on Sept. 7.

According to the investigation, the oligarch set up a scheme between January and March 2015 to transfer funds from PrivatBank to his offshore company and increase his own share in the bank's capital.

For this purpose, the bank was obliged to pay over $250 million to the said offshore company under the pretext of allegedly repurchasing its own bonds at an inflated cost.

Part of the funds, to the amount of $12 million, were later transferred to five legal entities allegedly to facilitate the purchase, only to eventually end up in the personal account of Kolomoisky.

The oligarch is among six suspects allegedly involved in the scheme, also including PrivatBank's former chairman of the board and other senior ex-officials.

Oligarch Kolomoisky is behind bars. How did he get there and can he find a way out?
Ihor Kolomoisky’s recent arrest is the latest episode in a prolonged, hard-fought slide from grace for one of Ukraine’s most notorious oligarchs. At his height, he governed a region, controlled huge chunks of multiple industries, made good use of his massive TV network, and a cadre of loyal politic…

Kolomoisky was charged and arrested earlier this month in relation to alleged financial manipulation with his oil and gas holdings.

The oligarch controlled Ukrtatnafta, Ukraine's largest refining company until it was seized by the government in November, citing it as a critical national resource during martial law.

The company reportedly refused to pay Hr 3.2 billion ($90 million) in taxes last year.    

Kolomoisky also owned over 40% of Ukrnafta, an oil and gas extractor, through multiple smaller companies in his orbit. The Ukrainian state seized this company as well last year.

In 2016, the government also nationalized PrivatBank, the country's largest bank - when Kolomoisky co-owned it, the bank's fraudulent activities left a $5.5 billion hole in its balance sheet.

The combative oligarch's business dealings through these companies careened from scandal to scandal over the previous decade.

Kolomoisky also faces various lawsuits and charges in the U.K., U.S., Israel, and Ukraine.

Investigators search Kolomoisky, Avakov, incumbent top officials in unprecedented raid
Law enforcement agencies on Feb. 1 searched the houses of several incumbent and former top officials and an oligarch in what appears to be the largest anti-corruption raid since the beginning of Russia’s invasion in February 2022. Among others, law enforcers raided powerful oligarch Ihor Kolomoisky…
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