A Ukrainian court has ruled that nationalizing the country's largest bank was illegal, dealing a blow to President Petro Poroshenko ahead of key elections. Returning the bank could prompt a deep crisis, Poroshenko said.
A Kyiv court sided with Ukrainian tycoon Ihor Kolomoyskyi on Thursday, declaring that the government takeover of his PrivatBank was illegal in a decision which sent out shockwaves across the country.
Returning the bank to Kolomoyskyi would be a "reckless move" which threatens "a default and a new economic crisis," President Petro Poroshenko said.
The government nationalized the country's biggest lender in December 2016, claiming that PrivatBank was involved in money laundering and fraudulent lending practices. Kolomoyskyi denies any wrongdoing and claims the bank was forcibly taken from him without any compensation. The businessman has moved to Israel following a conflict with Poroshenko in 2015.
No going back
The takeover was allegedly part of Ukraine's clean up of the national banking system, which is endorsed by the International Monetary Fund (IMF). Closure of the bank would lead to a financial meltdown, officials said at the time. The government has since poured nearly $6 billion (€5.34 billion) into the bank in a bid to shore up the institution.
Following Thursday's ruling, the country's central bank said nationalization could not be reversed. Deputy Central Bank Governor Kateryna Rozhkova said she also saw no grounds for PrivatBank's former owners to be compensated.
"Our international partners do not accept this decision and do not understand the arguments of the court," she added.
Both the bank and the nation's finance ministry pledged to appeal the verdict.
Poroshenko claims conspiracy
The Thursday ruling comes just days before Poroshenko is set to face political rival Volodymyr Zelenskiy, with Poroshenko trailing in the polls.
Throughout the campaign, Poroshenko has accused Zelenskiy of being a puppet of oligarch Kolomoyskyi.
"The plan of one of the fugitive oligarchs is to get Privatbank back in case of Zelenskiy's win," Poroshenko said. "As you can see, they can't wait any longer."
An anti-Zelenskiy sticker shows him with Kolomyskyi, with the caption reading "Servant of the oligarch - Puppet of the oligarch"
"They've already started implementing their plans."
Kolomoyskyi owns TV channel 1+1 which shows Zelenskiy's sitcom "Servant of the People."
The actor and comedian Zelenskiy, however, claims he has only professional dealings with Kolomoyskyi. Zelenskiy also repeatedly said he would not try to denationalize the bank.
Ukrainians are set to choose between Poroshenko and Zelenskiy in the final presidential vote on Sunday.
dj/jm (Reuters, AP, AFP)