Private Bank's Legal Victory
Date: 2023-11-02 Author: Dima Zakharov Categories: ECONOMY
Private Bank's long-standing dispute over the ownership and control of 245 gas stations took a positive turn on November 1st. The Central Appellate Commercial Court's decision marked a crucial victory for the bank, finally putting an end to a legal struggle that has spanned six years.
The issue began in 2016 when Private Bank, prior to its nationalization, included 245 gas stations on its balance sheet through a mortgage enforcement process, in compliance with the National Bank of Ukraine's requirements. The goal was to enhance the quality of collateral for loans and improve the bank's credit portfolio.
However, the situation quickly escalated as Private Bank, under the guidance of its former management, promptly leased these gas stations to companies affiliated with the "Privat" group. The bank entered into 22 leasing agreements with 15 lessees, who, in turn, subleased the gas stations to other entities within the same group. Lawyers representing Private Bank argued that the initial inclusion on the balance sheet followed by subsequent leasing was done with legal violations.
The repayment of leasing fees followed a typical pattern associated with Igor Kolomoisky's group: in the early years, only interest payments were made, with the principal amount added later. Simultaneously, the valuation of the gas stations during the transfer to the bank's balance sheet was significantly inflated. From 2018, lessees began reducing their leasing payments, eventually ceasing them altogether.
The issue began in 2016 when Private Bank, prior to its nationalization, included 245 gas stations on its balance sheet through a mortgage enforcement process, in compliance with the National Bank of Ukraine's requirements. The goal was to enhance the quality of collateral for loans and improve the bank's credit portfolio.
However, the situation quickly escalated as Private Bank, under the guidance of its former management, promptly leased these gas stations to companies affiliated with the "Privat" group. The bank entered into 22 leasing agreements with 15 lessees, who, in turn, subleased the gas stations to other entities within the same group. Lawyers representing Private Bank argued that the initial inclusion on the balance sheet followed by subsequent leasing was done with legal violations.
The repayment of leasing fees followed a typical pattern associated with Igor Kolomoisky's group: in the early years, only interest payments were made, with the principal amount added later. Simultaneously, the valuation of the gas stations during the transfer to the bank's balance sheet was significantly inflated. From 2018, lessees began reducing their leasing payments, eventually ceasing them altogether.
