Economy 2023-07-15T09:49:37+03:00
Ukrainian news
NBU: EY Fails To Establish Volume Of Loans Given By PrivatBank To Former Owners

NBU: EY Fails To Establish Volume Of Loans Given By PrivatBank To Former Owners

NBU, PrivatBank, EY, audit, loans

The National Bank of Ukraine says the EY audit company has failed to establish the volume of loans PrivatBank gave to former owners of the financial institution before its nationalization in December 2016.

Vitalii Vavrischuk, the financial stability department of the National Bank, wrote this in a column of the Ekonomicheskaya Pravda outlet, Ukrainian News Agency reports.

"The new auditor, who was endorsed by the independent supervisory board of PrivatBank, failed to establish how much in loans had been given to businesses of former shareholders. It was technically impossible in the environment of absence of communication with former management and borrowers. The latter ignored letters of the auditor with a request to provide explanations on questions of loans to related parties," he said.

Vavrischuk notes that PrivatBank was saved by Ukrainian taxpayers. The expenses for saving the bank are estimated at UAH 3,500 per capita.

According to him, a typical borrower of PrivatBank was a company without production assets, without profits, without personnel.

Vavrischuk says the team of National Bank made efforts in 2015 to establish true borrowers of PrivatBank.

"Following long negotiations the management of the bank admitted that the true borrowers were other companies and 'empty' companies were only mediators. Most of them belonged to nominal holders with Greek names. Managers of the bank began to disclose names of companies that were true borrowers, according to them. There were foreign companies also. However, they gave no documents confirming true end borrowers of PrivatBank. Nevertheless, the management of the bank continued to insist that true owners of businesses who borrowed the funds were not linked with the shareholders of the bank," he said.

The regulator believes that the true borrowers were linked with one another and with former owners of the bank.

As Ukrainian News Agency earlier reported, according to financial reporting of PrivatBank confirmed by auditors of EY, as at January 31, 2016, the reserve for depreciation of loans to legal entities was increased by UAH 155.9 billion.

The auditor received information from PrivatBank showing that on December 19, 2016 (the nationalization of PrivatBank) the volume of operations with related parties made a mere of UAH 9.9 billion. However, the auditor did not confirm the information.

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