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article imageUkraine rekindles war on top tycoon Kolomoyskiy

By Dmitry ZAKS (AFP)     Sep 29, 2017 in World

A Kiev court has frozen four rail assets of billionaire Igor Kolomoyskiy in a long-running corruption case that led to the state's eventual takeover of Ukraine's largest private bank.

The decision rekindled an off-and-on battle against a powerful tycoon whom Forbes magazine ranked in 2016 as Ukraine's second-richest man thanks to assets worth $1.3 billion.

It also returned to the forefront the future of Ukraine's ailing banking sector and the question over the commitment of the pro-Western government of President Petro Poroshenko to tackling outsized graft.

Kiev's Pecherskiy Court issued a ruling Thursday whose copy was obtained by AFP saying it was taking over the rail assets of four mining enterprises put up as collateral by Kolomoyskiy in 2014 to help raise rescue loans for his PrivatBank lender.

The systemic private bank's bankruptcy would have wiped out the savings of a third of the population and effectively paralysed the financial system of the former Soviet state.

The finance ministry said in February that more than 60 percent of all retail payments were being channelled through PrivatBank.

The economy was already nosediving in 2014 -- the year Kiev ousted a Kremlin-backed government in a pro-EU revolution that saw Russia respond by annexing Crimea and allegedly stoking a war in Ukraine's east that has claimed more than 10,000 lives.

The Kiev court ruling said PrivatBank received 19 billion hryvnias in emergency credits over the course of 2014. The Ukrainian currency's value fluctuated wildly that year but the figure is worth nearly $2 billion.

The court added that the money was "acquired" by Kolomoyskiy and his business partners through illegal schemes that saw none of the funding actually go into stabilising PrivatBank.

The bank was found guilty of issuing multiple loans of between $18 million and $73 million to offshore companies ultimately owned through complex schemes by Kolomoyskiy and his partner Gennadiy Bogolyubov.

The nearly $2 billion were part of a $5.6-billion (4.7-billion-euro) hole that PrivatBank piled up before being taken over by the Central Bank of Ukraine in December 2016.

Former central bank chief Valeria Gontareva said at the time that 97 percent of PrivatBank's loans had been issued by Kolomoyskiy to his business partners who might either have not paid them back or had done so on preferential conditions.

The same Kiev court has already seized from Kolomoyskiy's empire a Kiev building that is being leased by one of Ukraine's most popular TV stations as well as a drinks manufacturer in the city of Dnipro and a Boeing jet.

Kolomoyskiy complained in December of being a "victim of the arbitrary rule of the central bank".

But he also promised to restructure his bad loan portfolio by July of this year in order to reduce the strain PrivatBank's takeover put on the state budget.

Kolomoyskiy failed to meet that obligation and thus saw a part of his holdings impounded by the Pecherskiy Court.

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