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 PGO initiated criminal case into bringing Privatbank to insolvency, - Chairman Shlapak

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Prosecutor General's Office has initiated a case into bringing Privatbank to insolvency.

This was announced by the bank's Chairman of the Board Oleksandr Shlapak, Censor.NET reports citing Interfax-Ukraine.

"The PGO initiated criminal cases for the first time today under articles 218 and 220 - bringing the bank to insolvency," he said.

Shlapak said he meant loans to 36 companies worth 133 billion hryvnia, issued in October-November 2016, that were used to repay loans of 193 other borrowers of the bank, more than half of them at 12-12.5 percent annually, in USD, and with real security.

The chairman said the new loans were issued at 10.5 percent annually, while the bank loan committee had approved the rate at 34 percent annually, and the bank attracted funds from the National Bank at 22 percent, from individuals - at 19 percent, from legal entities at 14.2 percent.

Read more: Former owners of Privatbank did not reorganize bank's loan portfolio by July 1 as promised, - Finance Ministry. DOCUMENT (in Ukrainian)

"This is the top of the financial scheme of Privatbank," Shlapak said.

He added that most of the new borrowers did not conduct any business activity, were younger than one year, and had negative financial standing.

Shlapak said all 36 loans were signed by the former chairman of the board, Oleksandr Dubilet, with him exceeding the powers. The National Bank was provided unreliable data on uncovered credit risk and undeveloped reserves, and borrowers were not checked for relatedness, their financial position was artificially overstated.

On Dec. 18, the Cabinet of Ministers announced its decision to nationalize Privatbank, the largest privately-held bank of Ukraine. The government intends to issue 30-year domestic government loan notes worth 150 billion hryvnia ($5.54 billion) and become a 100-percent owner of the bank. The bank's first deputy CEO announced the decision was made after an unprecedented information attack on the bank and a threat it posed to its clients.
 
 
 
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