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Reuters
2 minutes ago
- Business
- Reuters
Ukraine's PrivatBank wins UK lawsuit against former owners over alleged fraud
LONDON, July 30 (Reuters) - Ukraine's PrivatBank on Wednesday won its London lawsuit against its former owners for allegedly siphoning off nearly $2 billion from the country's largest lender. PrivatBank accused Ihor Kolomoisky – a once-powerful businessman and supporter of President Volodymyr Zelenskiy's 2019 election run – and Gennadiy Bogolyubov of orchestrating sham loans and supply agreements between 2013 and 2014. The lender 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, who has been detained since September 2023 on suspicion of fraud and money laundering, and Bogolyubov – whom Ukrainian investigators this month said illegally left the country – both denied any wrongdoing. Their lawyers said at a trial starting in June 2023 that there was no misappropriation from PrivatBank, which they argue had no evidence they had any knowledge of, or involvement in, the alleged fraud. The case was closely watched by politicians and investors as a test of Zelenskiy's willingness to pursue reforms and tackle the corruption which has blighted Ukraine for years, amid its ongoing war with Russia. Judge William Trowler ruled in favour of PrivatBank, saying Kolomoisky and Bogolyubov were "jointly and severally liable" for around $1.9 billion, less any sums which may have previously been received by the bank.
Miami Herald
5 days ago
- Politics
- Miami Herald
Why Anti-Corruption Watchdogs Are at the Heart of Ukraine's Unrest
EDITORS NOTE: EDS: SUBS throughout to update; NEW headline.); (ART ADV: With photos.); (With: SPAIN-MILITARY-SPENDING); Oleksandr Chubko contributed reporting from Kyiv, Ukraine. KYIV, Ukraine -- The anti-corruption agencies at the heart of Ukraine's current political turmoil grew out of the pro-Western pivot of 2014, amid popular frustration with graft and reflecting Western demands to crack down on theft of foreign aid. This week showed how potent a political issue corruption still is. With the agencies recently investigating senior members of President Volodymyr Zelenskyy's government, this week he and parliament stripped them of their independence and security forces raided their offices. That, and other moves to muffle criticism and scrutiny, prompted thousands of people to take to the streets in the first mass anti-government protests in years. Zelenskyy quickly reversed course, submitting a bill to parliament Thursday to restore the two anti-corruption agencies' autonomy. The agencies themselves endorsed the bill and urged lawmakers to pass it. The question now is whether that will be enough to quell the unrest in a country that had shown remarkable unity since Russia's full-scale invasion 3 1/2 years ago, despite the flagging popularity of Zelenskyy, who campaigned for office as a corruption fighter. The surge of anger, with protesters in Kyiv and other cities toting profanity-laced signs directed at Zelenskyy and his top advisers, underscores the pivotal role of those watchdog agencies in Ukraine's politics and the sensitivity of the issues they investigate. None are more fraught than alleged schemes to embezzle from military budgets. On Tuesday, Zelenskyy signed into law a bill giving Ukraine's prosecutor general -- who is approved by parliament, where Zelenskyy's party holds a majority -- new power over the two agencies, the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor's Office. The two agencies, formed with strong Western backing, had been investigating senior government officials, including a deputy prime minister, Oleksiy Chernyshov, who was charged with corruption on June 23, accused of taking kickbacks in a real estate deal. Chernyshov has called the accusations against him a baseless smear campaign. Also on Wednesday, the two agencies said they had completed and would send to court one aspect of an investigation into what could be the largest fraud in public finance in Ukraine in a decade. The case involves accusations of embezzlement from a lender, PrivatBank, that the government bailed out at a cost of about $5 billion. An owner of the bank, Ihor Kolomoisky, had been a behind-the-scenes patron of Zelenskyy's presidential campaign in 2019, Ukrainian news media reported. Kolomoisky has said that he is innocent, and that authorities who brought the charges are trying to extort money from him. But no accusation of fraud is more infuriating to Ukrainians than ones of theft from a military that is defending their homes and lives, shooting down missiles and exploding drones that terrorize cities nightly, and holding a roughly 700-mile defensive line in eastern Ukraine. Since the war began in 2022, the anti-corruption agencies have scrutinized such spending, which now accounts for about half of Ukraine's $98 billion national budget, resulting in criminal cases that have enraged Ukrainians. (Ukraine's military spending is not tied to the flow of weapons and supplies donated by the United States and other nations, and there have been no documented instances of fraud involving that materiel.) Overall, Ukraine has over the past decade improved governance and tamped down graft, according to a measure by Transparency International. And corruption has not worsened during the war, according to the group. But the country still scores poorly on the group's corruption index and other independent ratings. After Russia's invasion, government money started shifting from partly state-controlled energy, mining and metallurgy companies -- previously the trough from which corrupt officials fed -- to military spending, analysts have said. The anti-corruption bureau has announced several investigations into that spending, accusing insiders of helping to skim about $675,000 from contracts for airplane wheels and about $18 million from a contract for food staples including potatoes. Internal audits by the Defense Ministry have pointed to far larger instances of potential fraud or mismanagement, some stemming from an early, chaotic period in the war. After the 2022 invasion, U.S. intelligence expected that Ukraine's military would buckle within days and that Russia would capture Kyiv, the capital. Ministries emptied out as employees fled. With just skeleton staff and tremendous need, one audit showed, the government made multiple contracts for artillery shells, mortar bombs and other weapons and ammunition at inflated prices from shadowy suppliers in Eastern Europe, the Middle East and Asia. After the war stabilized, the insider intermediaries who brokered these deals through "special importing companies" retained a role in procurement, another audit, conducted last year, showed. That audit showed special importing companies received 45% of the total value of all contracts for arms and ammunition last year, even when the Defense Ministry could have worked directly with a supplier. The companies received a minimum 3% commission. According to the audit, about half of all contracts from the companies were either late or incomplete -- depriving soldiers of weapons while leaving prepayments in the companies' accounts. In a government shake-up last week, Zelenskyy appointed a former prime minister, Denys Shmyhal, as defense minister. Shmyhal said that as a first order of business, he had requested a fresh audit of procurements. Artem Sytnyk, a former director of the anti-corruption bureau and a former procurement official at the ministry, said in an interview that the agency was investigating the procurement deals made by intermediaries. He said he had tried to crack down on those companies last year, adding, "not everybody liked this, so there was a change of leadership" at the defense procurement agency, and he was fired. He did not say who specifically had opposed the investigations. This article originally appeared in The New York Times. Copyright 2025
Boston Globe
6 days ago
- Politics
- Boston Globe
Anti-corruption watchdogs at the center of protests against Zelensky
Ukraine's military spending is not tied to the flow of matériel donated by Western allies, and there have been no documented instances of fraud involving that weaponry. Advertisement On Tuesday, Zelensky signed into law a bill giving Ukraine's prosecutor general — who is approved by parliament, where Zelensky's party holds a majority — new power over the two agencies, the National Anti-Corruption Bureau of Ukraine and the Specialized Anti-Corruption Prosecutor's Office. The two agencies were formed after the pro-Western political pivot in Ukraine following protests in 2014. They were given a mandate to investigate and prosecute cases of high-level corruption, and Western countries strongly backed their formation to crack down on theft of foreign aid. Advertisement The agencies had recently been investigating senior members of Zelensky's government, including a deputy prime minister, Oleksii Chernyshov, who was charged with corruption on June 23, accused of taking kickbacks in a real estate deal. Chernyshov has called the accusations against him a baseless smear campaign. On Wednesday, amid the protests, the prosecutor general, Ruslan Kravchenko, said he would not interfere in that inquiry. Also on Wednesday, the two agencies said they had completed and would send to court one aspect of an investigation into what could be the largest fraud in public finance in Ukraine in a decade. The case involves accusations of embezzlement from a lender, PrivatBank, that cost the country about $5 billion to bail out. An owner of the bank, Ihor Kolomoisky, had been a behind-the-scenes patron of Zelensky's presidential campaign in 2019, Ukrainian news media reported. Kolomoisky has said that he is innocent and that the authorities who brought the charges are trying to extort money from him. But no accusation of fraud is more infuriating to Ukrainians than one of theft from a military that is defending their homes and lives, shooting down missiles and exploding drones that terrorize cities nightly, and holding a roughly 700-mile defensive line in eastern Ukraine. Overall, Ukraine has over the past decade improved governance and tamped down graft, according to a measure by Transparency International. And corruption has not worsened during the war, according to the group. After Russia's invasion, government money started shifting from partly state-controlled energy, mining, and metallurgy companies — previously the trough from which corrupt officials fed — to military spending, analysts have said. Now, about half of Ukraine's national budget of about $98 billion is for defense. Advertisement The anti-corruption bureau has announced several investigations into that spending, accusing insiders of helping to skim about $675,000 from contracts for airplane wheels and about $18 million from a contract for food staples, including potatoes. Internal audits by the Defense Ministry have pointed to far larger instances of potential fraud or mismanagement, some stemming from an early, chaotic period in the war. After the 2022 invasion, US intelligence expected that Ukraine's military would buckle within three days and that Russia would capture Kyiv, the capital. Ministries emptied as employees fled. With just a skeleton staff and tremendous need, one audit showed, the government made multiple contracts for artillery shells, mortar bombs, and other weapons and ammunition at inflated prices from shadowy suppliers in Eastern Europe, the Middle East, and Asia. After the war stabilized, the insider intermediaries who brokered these deals through 'special importing companies' retained a role in procurement, another audit, conducted last year, showed. That audit showed special importing companies received 45 percent of the total value of all contracts for arms and ammunition last year, even when the Defense Ministry could have worked directly with a supplier. According to the audit, about half of all contracts from the companies were either late or incomplete, depriving soldiers of weapons while leaving prepayments in the companies' accounts. Artem Sytnyk, a former director of the anti-corruption bureau and a former procurement official at the ministry, said in an interview that the agency was investigating those deals. Unless Zelensky's overhaul is reversed, those investigations will fall under the control of the prosecutor general. This article originally appeared in Advertisement
Yahoo
15-02-2025
- Politics
- Yahoo
What's at stake for Poroshenko, ex-president sanctioned by Zelensky?
In an unprecedented move, President Volodymyr Zelensky imposed sanctions on his predecessor and key political rival, lawmaker Petro Poroshenko. Poroshenko, who was elected president in 2014, lost his reelection bid in 2019 to Zelensky in a bitter campaign that often included personal attacks. The rivalry between the two did not subside after the election. "We are defending our state and restoring justice. Everyone who destroyed Ukraine's national security and helped Russia must be held accountable. The billions that were earned by actually selling Ukraine, Ukrainian interests, Ukrainian security must be blocked and must work to protect Ukraine," Zelensky said in an evening address on Feb. 12, referring to Poroshenko, whose net worth was over $1 billion. The sanctions came as a number of Ukrainian politicians appeared to have begun election preparations following looming peace talks and a push from the U.S. Along with Poroshenko, four more tycoons faced sanctions: oligarch Ihor Kolomoisky, multimillionaire Kostiantyn Zhevago, former PrivatBank co-owner Hennadii Boholyubov, and Viktor Medvedchuk, a former pro-Russian lawmaker accused of high treason. Kolomoisky is now behind bars, while the others have fled Ukraine or ended up in Russia. None of them hold power in Ukraine at this time. All have been charged with a variety of crimes in the past, ranging from money laundering to high treason. The sanctions froze all assets held by the targeted individuals in Ukraine and blocked them from conducting financial transactions, among other restrictions. The decree states that the measures are indefinite. Poroshenko called the sanctions against him "politically motivated" and "unconstitutional." The Kyiv Independent explains why Poroshenko was targeted now, what he is set to lose and what the ex-president's future might look like. Read also: Following an attack on opposition, Zelensky effectively begins election season Poroshenko said that, as of late January, around 130 criminal cases had been opened against him. Most of them were launched after appeals by people who were either convicted or fled to Russia, he said. That's not exactly true. Prior to the full-scale invasion, in December 2021, the former president was charged with high treason for what the prosecution said was aiding Russian-controlled militants in the occupied parts of Donetsk Oblast. He was accused of organizing the supplies of coal from Russian-occupied areas to Ukrainian companies in 2014-2015. The Russian-occupied Donetsk Oblast was a heavily industrialized region and the source of the country's coal and other critical materials. If found guilty, Poroshenko could face 10 to 15 years in prison. Besides Poroshenko, the coal supplies case involves Medvedchuk, who allegedly negotiated with both Russia and its proxies, and Poroshenko administration on the coal supplies. Poroshenko has denied wrongdoing. After Moscow launched its full-scale invasion, the investigation of criminal cases against the ex-president was halted. Three years later, the suspended criminal case was one of the official reasons for imposing sanctions against Poroshenko. Citing their sources in law enforcement, Ukrainian media outlets have given a variety of other reasons for Poroshenko to be punished by authorities. The reasons range from Poroshenko's political activities, like his involvement in the creation of the now-banned Party of Regions in 2000, as well as being a minister under Pro-Russian President Viktor Yanukovych in the early 2010s. Another reason given was the fact that Poroshenko was slow in selling his business in Russia and the occupied parts of Ukraine following the start of Russia's war in 2014. The Roshen factory, a confectionery plant owned by Poroshenko, in Russia's Lipetsk halted operation in 2017 and was nationalized by Russia in 2024. "These are events that happened in 2000, 2010, 2014. It's ridiculous to accuse Poroshenko of creating the Party of Regions in 2000," Professor Oleksiy Haran, research advisor at the Democratic Initiatives Foundation, told the Kyiv Independent. "I don't want to present Poroshenko as an angel. But, unfortunately, it (sanctions) harms Ukraine's prestige abroad," he added. Zelensky also accused Poroshenko of circumventing billions from Ukraine and did not rule out that sanctions could be lifted after he "returns the withdrawn funds" to the budget. For years, Poroshenko was listed among the wealthiest people in Ukraine. He first became a billionaire in 2012, according to Forbes. Poroshenko and his son, Oleksiy Poroshenko, ranked third on the list in 2023 with a net worth of $954 million, according to NV media outlet. A year later, only Poroshenko's son remained in third place on the list of the richest, with a fortune estimated at $1.2 billion. Some of the former president's assets were frozen in January 2022 following treason charges. However, Poroshenko's largest businesses remained untouched. After losing the 2019 presidential election, he began transferring his assets to his son, Oleksiy. The key asset of the Poroshenko family is the Roshen confectionery, which saw a profit of Hr 5.64 billion ($135 million) in the first half of 2024 alone, according to NV. Oleksiy Poroshenko also now owns Ukrprominvest-Agro, one of Ukraine's leading agricultural companies. According to YouControl, Petro Poroshenko remains the beneficiary of several companies, including the Kyiv-based International Investment Bank. It is unclear which of Poroshenko's assets can be affected by sanctions. Poroshenko also owned Channel 5 and Pryamyi TV channel until 2021. He sold them to his allies to avoid being labeled as an "oligarch." The channels are still loyal to Poroshenko and harshly critical of Zelensky. Both channels have not been part of the Ukrainian TV marathon — a pool of five TV broadcasters formed under the government's directive to share resources and cover the war. Channel 5 and the Pryamyi TV channel were also deprived of digital broadcasting, which some saw as a violation of freedom of speech. Ukrainian political analyst Volodymyr Fesenko said that the sanctions against prominent businessmen are "a reminder of the war against the oligarchs." In 2021, Zelensky's anti-oligarch laws created a register of individuals, establishing a legal definition of an oligarch. The process stalled due to the start of the all-out war and remained largely forgotten since. "This is a warning to big business. That in a time of war, even inside the country, there will be tough methods for those who will launch any information or political campaigns against the government," Fesenko added. The legality of sanctions against Ukrainian citizens has always been questioned by observers. Yet, the majority of Ukrainians have backed the sanctions that were slapped on notorious figures and pro-Russian politicians. When asked, 31% of Ukrainians answered that they see sanctions against Poroshenko as an attempt to divert public attention from the difficult battlefield situation, a poll conducted by the Kyiv International Institute of Sociology showed. Another 24% think that it is an attempt to "neutralize the opposition" before potential elections and only 27% see them as an attempt "to punish actual criminals." "The main problem is that this (sanctions) will be perceived as a political tool," Fesenko said. "It was necessary to use traditional legal mechanisms rather than sanctions. Investigation and court," he added. According to the Law on Sanctions, Ukraine can impose sanctions against foreigners and foreign entities, as well as Ukrainians who engage in terrorist activities. Ukraine's Prosecutor General's Office reported on Feb. 14 that investigations into Poroshenko and the other four businessmen are ongoing. In response to criticism from European partners, Ruslan Stefanchuk, speaker of the Ukrainian parliament, said that sanctions against Poroshenko are "in no way a substitute" for the criminal cases against him. "These are not political issues but legal ones. The final decisions should be made exclusively by the court, as is customary in countries with stable democracies," Stefanchuk said. According to Fesenko, sanctions could prevent Poroshenko from actively participating in political and information campaigns. At the same time, experts don't see Poroshenko as a competitor for Zelensky, given the results of multiple polls. Sanctions against him may consolidate Poroshenko's backers and harm Zelensky's popularity, but are unlikely to change this tendency, experts say. "The war with Russia is not over yet, and we are starting internal political wars," Fesenko said. "Unfortunately, Zelensky's opponents are also waging an open war against him. It is mostly informational, a little bit political. But a war is a war." We've been working hard to bring you independent, locally-sourced news from Ukraine. Consider supporting the Kyiv Independent.
CNN
14-02-2025
- Business
- CNN
Ukraine sanctions ex-president Poroshenko on ‘national security' grounds
Ukraine imposed sanctions on former president and opposition politician Petro Poroshenko, including an asset freeze and a ban on withdrawing capital from the country, for what the domestic spy agency said on Thursday were 'national security' reasons. Poroshenko, one of Ukraine's richest men who heads the largest opposition party in Ukraine's parliament, served as president from 2014 until 2019 when he lost his bid for a second term at an election won by President Volodymyr Zelensky. The 59-year-old confectionary magnate, sometimes referred to as 'the Chocolate King,' sees Zelensky as a long-standing political rival and accused the Ukrainian president of an unconstitutional and politically motivated move. The domestic spy agency, known as the SBU, said the sanctions were imposed due to 'existing threats to national security, territorial integrity and sovereignty of Ukraine' and the 'creation of obstacles to sustainable economic development.' Ukraine also announced sanctions against jailed tycoon Ihor Kolomoisky, former co-owner of PrivatBank Gennadiy Bogolyubov, Viktor Medvedchuk, a close ally of Russian President Vladimir Putin, and businessman Kostyantyn Zhevago. Bogolyubov, Kolomoisky and Medvedchuk could not be reached for comment. Representatives for Zhevago's company Ferrexpo did not immediately respond to a request for comment. 'The billions made in what amounted to the sale of Ukraine and Ukrainian interests and Ukrainian security must be blocked and made to work for the protection of Ukraine and Ukrainians,' Zelensky said. The sanctions come amid signs of increasing activity on Ukraine's political landscape, as a push by U.S. President Donald Trump to end the war with Russia opens up the possibility of a future election. Martial law, which Ukraine has had since Russia launched its invasion in February 2022, prohibits holding elections. Zelensky's mandate would normally have ended in May last year. Before Russia invaded, Poroshenko had been the subject of several criminal investigations. He has always denied wrongdoing. Ukrainian President Volodymyr Zelensky's five-year term officially expired Monday, but with the country still under martial law amid the ongoing war, he will remain in office for the foreseeable future. CNN's Paula Newton speaks to Ukrainian journalist Nataliya Gumenyuk about why many Ukrainians are okay with delaying a new election. 'When it is made public, people will be shocked how during the war people use funds supposedly set up to support the military (to) launder the money and give it to members of their party,' Zelensky said. He did not specify who he was referring to, but Poroshenko has both a political party and a wartime charity fund to support the military. There was a slew of criticism of the sanctions from Poroshenko's domestic allies, as well as from some figures abroad. Carl Bildt, a former Swedish prime minister who now serves as co-chair of the European Council on Foreign Relations think tank, said the sanctions would damage Zelensky's reputation in Europe. 'To impose sanctions on Poroshenko will be seen as pure political revenge. Sure, he had business in Russia in the past, but so did Zelensky,' Bildt wrote on X.
