PrivatBank sues Kolomoyskiy in U.S. court:
By Todd Prince
A major Ukrainian bank at the center of a scandal involving a powerful, politically connected billionaire has sued its former oligarch owners in U.S. court, amid a battle for control that could affect relations with Western lending institutions.
PrivatBank, which was nationalized by Ukraine three years ago, filed the lawsuit on May 21 in Delaware state court against Ihor Kolomoyskiy and Hennadiy Boholyubov.
The suit was filed one day after Ukraine's newly elected president, Volodymyr Zelenskiy, was sworn into office.
Zelenskiy is linked to Kolomoyskiy through the oligarch's ownership of the TV station that hosted a comedy program in which Zelenskiy starred. Zelenskiy has also appointed a lawyer for Kolomoyskiy to be his chief of staff.
Kolomoyskiy, who had been living in self-imposed exile for almost two years, returned to Ukraine following Zelenskiy's election on April 21.
The lawsuit comes as Kolomoyskiy seeks to regain control of the bank he helped found in 1992. The National Bank of Ukraine nationalized it in 2016 under then-President Petro Poroshenko and regulators later injected roughly $6 billion of Ukrainian taxpayer money to prevent its collapse.
A Ukrainian court ruled last month that the nationalization was illegal, boosting the chances that Kolomoyskiy could once regain control of the bank.
The lawsuit filed in Delaware Chancery Court accusеs the two Ukrainians, as well as three residents of Miami, Florida, of fraud and money laundering that nearly destroyed the lender, according to court records.
PrivatBank accused Kolomoyskiy and Boholyubov of lending money to companies they controlled and later laundering it through Delaware entities to acquire assets in the United States, including property and metals companies.
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 and Boholyubov could not be immediately reached for comment.
Zelenskiy's ties to Kolomoyskiy have raised concerns that, as president, he might be partial to the tycoon's business interests.
During the election campaign, Zelenskiy denied he would seek to hand the bank back to Kolomoyskiy, a move that would damage relations with the International Monetary Fund.
The fund has loaned Ukraine billions of dollars over the past five years, but has made much of the lending contingent on Ukrainian leaders doing more to clean up the country's endemic corruption.
Last month, the fund urged Ukraine to continue efforts to recover losses from failed banks, including PrivatBank, from former owners and said that it was "closely monitoring developments in this area.''
The Washington-based fund declined to comment on the lawsuit.
We are now closing the live blog for today, but we'll be back again tomorrow morning to follow all the latest developments. Until then, you can keep up with all our other ongoing Ukraine coverage here.