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Ex-Zelensky sponsor charged with $250-million fraud

Billionaire Igor Kolomoysky has been accused of illegally seizing funds from a bank to consolidate his ownership of the lender

Ukrainian oligarch Igor Kolomoysky was charged with embezzlement on Thursday. Ukraine’s National Anticorruption Bureau (NABU) has accused the businessman, whose backing is thought to have helped Vladimir Zelensky secure the country’s presidency, of illegally taking funds from a bank he controlled to further increase his share in the lending institution’s authorized capital.

According to a NABU statement published on Telegram, Kolomoysky, together with five other suspects, took a total of more than 9.2 billion hryvnias ($250 million) from Ukrainian lender PrivatBank back in 2015 to finance his dealings. The billionaire, who was the ultimate beneficial owner of the bank at that time, forced PrivatBank to pay this sum to a specific company he controlled, under the pretext of supposedly buying out its own bonds at an inflated cost, the statement said.

The funds were then used to finance Kolomysky’s offshore company and increase his share in PrivatBank’s authorized capital, the authorities said. The NABU did not name the oligarch’s suspected accomplices.

Last week, the billionaire faced suspicion of laundering and siphoning off more than $13 million from Ukraine. The Ukrainian security service (SBU) said at that time that he had legalized more than 500 million hryvnias ($13.5 million) by “transferring it abroad, while using the infrastructure of banking institutions controlled by him.” The Ukrainian officials also said at that time that Kolomoysky was suspected of fraud, and legalization of property obtained by criminal means.

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The oligarch was arrested last Saturday and a court has ordered that he be detained for two months. A Ukrainian court then set bail at 509 million hryvnia ($13.8 million). The billionaire’s legal team said he would not post bail immediately and would appeal the ruling on his arrest instead. An appeal is expected to be heard later in September.

Kolomoysky came to prominence in Ukraine in 2014, when he was appointed governor of the southeastern Dnepropetrovsk Region in the wake of the Maidan coup. He was dismissed a year later amid a conflict with then-Ukrainian President Pyotr Poroshenko.

In 2016, the Ukrainian authorities nationalized Kolomoysky’s PrivatBank, which was declared a major threat to the Ukrainian financial system amid allegations of massive fraud.

The businessman is still widely considered to have played a prominent role in Vladimir Zelensky’s rise to power. The current Ukrainian president was a comedian whose show was hosted by a Kolomoysky-controlled media holding. The billionaire has admitted he “wanted” Zelensky to become president but has denied close ties to him.

September 08, 2023 at 01:32AM

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