It is reported that Ukrainian billionaire oligarchs Ihor Kolomoisky and Hennadiy Boholyubov, are facing a London civil suit. The suit alleges that they used fake purchasing agreements and fraudulent loans to embezzle $1.72 billion from Ukraine into offshore firms through three U.K. companies. A Kyiv Post investigation has uncovered two accountancy firms, a law firm and multiple individuals in the U.K. and Cyprus connected to these companies that may have played a role in the alleged scheme.

PrivatBank claimed a total of $5.5 billion was looted from the bank into offshore holdings. PrivatBank — Ukraine’s largest lender – was co-owned by Kolomoisky and Boholyubov until its nationalization in 2016. The Ukrainian central bank and Ministry of Finance said the bank faced insolvency without a bailout financed by Ukrainian taxpayers.

Lawyers acting for the bank claim that $721 million was embezzled through the firm Collyer Ltd, $494 million via Teamtrend Ltd, and $501 million went through Trade Point Agro Ltd, to offshore companies owned by the defendants in locations like Cyprus and the Carribean. Another $100 million was allegedly funneled through three more companies in the British Virgin Islands (BVI).

The three English firms under scrutiny appear to be shell companies. But behind them are a number of real accountancy and law firms in the U.K. and Cyprus. Despite that, Kolomoisky and Boholyubov have repeatedly denied any wrongdoing in relation to PrivatBank. They maintain that the state takeover — backed by the International Monetary Fund — was politically motivated. However, the Kyiv Post did not find any direct evidence of wrongdoing by NA Associates, Edwin Coe or EA UK, only a strong connection to defendant companies in the London proceedings.

Limited liability companies are popular tools in the U.K. because their accounts do not have to be audited, according to Graham Barrow, a London-based banking and anti-money laundering expert. According Barrow, it is often the case that when a limited liability company shares an address with an accounting firm, it is because that firm “probably created the company in the first place.” But this is not necessarily always the case.

PrivatBank and its lawyers have declined to comment on the Kyiv Post’s findings, stating that many elements of the ongoing proceedings are confidential.

 

The above report was first published in Risk Screen

 

Date: 6 Nov 2019

Argus Global specializes in regulatory compliance. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

 

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