REUTERS
The NBU, the Ministry of Finance, and the Ministry of Justice are preparing to appeal the first instance court decision that ruled unlawful the major bank's nationalization.
President of Ukraine Petro Poroshenko at a Thursday meeting of the National Security and Defense Council of Ukraine in connection with the developments around PrivatBank ordered that the government ensure the smooth operation of all branches of the state-owned PrivatBank, and called for the relevant agencies to assess first-instance judges, including those hearing the PrivatBank case.
“Today, with our coordinated actions, we must remove any risks, protect the interests of our people, defend our position on the stability of the national currency, and avoid panic that could ensue in the market,” Poroshenko said, an UNIAN correspondent reports.
In turn, Governor of the National Bank of Ukraine, Yakiv Smolii, expressed surprise at Thursday's court decision. He added that "based on the information that was announced at the court hearing ... we can tentatively conclude that it is impossible for the previous owners to get the bank back."
“We are doing everything possible to prevent panic and to prevent information influence on the stability of the banking system,” said Smolii.
He added that the NBU would appeal to the Ministry of Justice and the High Council of Justice to have the court ruling “revised”. “Of course, we will appeal against this court ruling after we receive a full text. And we will make every effort to prevent the decision to denationalize PrivatBank from being taken,” NBU governor said.
Finance Minister Oksana Markarova also noted that she disagreed with the ruling, adding that she supported the appeal.
Minister of Justice of Ukraine Pavlo Petrenko stressed "all decisions that had been taken on the bank's nationalization were lawful." "We are waiting for the reasoning part, the full text of the ruling to give it a proper legal assessment and appeal it," he said.
The minister also opined that the District Administrative Court made plenty of “ambiguous decisions”. "I have a proposal to the participants of the meeting - to appeal to the High Qualification Commission with a request, with a proposal to speed up [...] the process of qualification evaluation of the judges of first instance, including this particular court, so that we get a new court, a new composition of judges who will have undergone integrity assessment," said Petrenko.
Read alsoKyiv court rules PrivatBank's nationalization illegal
Summing up the meeting, Poroshenko noted that he was making a proposal to the National Bank – to ensure the smooth operation of all branches, provide enough cash for these branches, and prevent operational disruptions. The president instructed the Finance Ministry to analyze "risks and threats associated with the possible implementation of the ruling" if it enters into force, as well as "calculate possible losses of the state." Poroshenko also supported Petrenko's proposal. "We are asking to speed up the qualification assessments, including in terms of integrity, involving, if necessary, civic activists, the Public Integrity Council, to restart the District Administrative Court of Kyiv, and to finally have it undergo judicial reform," said the president.
He also appealed to the Security Service of Ukraine and the General Prosecutor’s Office of Ukraine to assess, after the completion of all necessary judicial procedures, the possibility of opening a criminal investigation for "unjust decisions." "As for the overall stability of the banking system, I would ask tomorrow to take the necessary communication steps in order to explain to the public that the position of the authorities is that the government retains control of the situation, the authorities will not allow negative developments, and provide the necessary steps to maintain stability,” Poroshenko said.
The president instructed the Foreign Ministry "to timely brief our international partners, including the European Bank for Reconstruction and Development ... the European Investment Bank, the World Bank, the International Monetary Fund, and representatives of G7, the United States of America, and the European Union."
As UNIAN reported, the Cabinet of Ministers in December 2016 decided to nationalize PrivatBank, guided by the recommendations of the National Security and Defense Council. Before nationalization, the key shareholders of the bank were businessman Ihor Kolomoisky and his partner Gennadiy Bogolyubov.
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On April 18, 2019, the Kyiv District Administrative Court declared unlawful and overturned the decision of 2016 to withdraw the "insolvent" PrivatBank from the market with the participation of the state. The full text of the decision will be announced by the college of judges within ten days.
According to a joint statement by the National Bank, the Ministry of Finance and PrivatBank, the return of the financial institution to its former owners through the cancellation of the nationalization decision is impossible. Also, the NBU reported its intentions to appeal the ruling within the prescribed time frame, or within 30 days from the receipt of the full text.
Chairman of the bank board, Peter Krumhansl, assured that the first instance court ruling rolling back nationalization would not affect the bank's work. According to him, the bank is operating as usual, its liquidity today is almost 100% and there are no emergency situations recorded, including massive withdrawals of money from the accounts, and limits on such operations.
Ukraine’s international partners, in particular the European Bank for Reconstruction and Development, the World Bank and the U.S. Embassy made statements on support for the nationalization of PrivatBank, as well as on the importance of indemnifying the losses by the former owners of bankrupt banks, and on intentions to closely monitor developments in this area.