Ukraine's Former National-Security Chief Says Resigned Over Privatbank

Ukraine's former national-security chief, Oleksandr Danylyuk, has said a "cluster of events" led to his resignation after just four months on the job, but the last straw was the situation around the country's biggest lender, Privatbank.

In an interview with the BBC's Ukrainian service published on October 3, Danylyuk said he began to see "negative signals" after President Volodymyr Zelenskiy was elected earlier this year.

They all revolved around Privatbank, which was once co-owned by influential oligarchs Ihor Kolomoyskiy and Hennadiy Boholyubov.

Danylyuk took part in nationalizing the bank when he was finance minister under the previous administration of Petro Poroshenko, after international auditors found a $5.5 billion hole in the lender's balance sheet.

Kolomoyskiy was against the central bank's move to put Privatbank in receivership and has been suing in Ukrainian courts to regain control over the financial institution.

A lawsuit the bank filed in Delaware against Kolomoyskiy and Boholyubov in May alleged the two former co-owners used Privatbank to engage in rampant third-party lending practices, even money laundering, and fraud.

The two men "used PrivatBank as their own personal piggy bank -- ultimately stealing billions of dollars from PrivatBank and using United States entities to launder hundreds of millions of dollars' worth of PrivatBank's misappropriated loan proceeds into the United States to enrich themselves and their co-conspirators," the lawsuit says.

Kolomoyskiy denies wrongdoing.

In the interview, Danylyuk said that in the weeks leading up to his resignation on September 27, he noticed Kolomoyskiy had started winning court cases in Ukraine to reverse the bank's nationalization. Searches by authorities of Privatbank's headquarters drew red flags. Also alarming was the former central bank chairwoman's house being burned down and her daughter-in-law's car being razed.

Danylyuk's resignation, therefore, was "not only an issue of reputation, it was an issue of values," he said.

Presidential office head Andriy Bohdan, who is Kolomoyskiy's former longtime personal lawyer, should follow suit and resign as well, Danylyuk said, because he had a conflict of interest.

"In the professional world, where everything is based on professional standards, if a person is a lawyer, then they have to avoid conflicts. And if you can't do this, then you should resign," Danylyuk said.

Danylyuk, a former employee of leading management consultancy McKinsey, said he had "strained relations" with Bohdan that originated during Zelenskiy's election campaign over having "different approaches, different backgrounds."

The current situation, as it is now, "discredits everyone" in Zelenskiy’s administration, Danylyuk said.

On September 30, Zelenskiy dismissed Danylyuk upon returning from a trip to the UN in New York.

On October 3, he appointed Oleksiy Danilov as secretary of the National Security and Defense Council.

Danilov is a former lawmaker and governor of the Luhansk region.

With reporting by BBC Ukraine