By Jason Bush and Megan Davies
MOSCOW, March 7 Russia's central bank is taking
steps to prevent the bankruptcy of the Moscow subsidiary of
Ukraine's Privatbank, the Bank of Russia said on Friday, after
Privatbank accused it of putting Moskomprivatbank under
administration for political reasons.
The central bank said it was taking the measures under a law
on banking system stability which enables the state-run Deposit
Insurance Agency to provide financial assistance to banks,
acquire their property and liabilities, acquire shares, and sell
The Deposit Insurance Agency has been appointed as the
bank's temporary administrator, the central bank said.
It added that, "Moskomprivatbank continues to work in a
normal regime, all clients, including depositors of the bank,
can use its services."
The central bank had suddenly announced on Thursday that it
had placed Moskomprivatbank, predominantly a retail bank with
about $1.4 billion of assets, under temporary administration.
Privatbank, Ukraine's largest bank, is a part of Privat
group, co-founded and co-owned by Igor Kolomoisky who was
appointed by Ukraine's Acting President Oleksandr Turchinov as
governor of Dnipropetrovsk region, Kolomoisky's birthplace, a
few days ago.
On Tuesday Russian president Vladimir Putin called
Kolomoisky "a unique impostor", accusing him of violating a
contract with Russian businessman Roman Abramovich.
"And such a scoundrel was made a governor of Dnipropetrovsk
region," the Putin told a press briefing in which he talked
about widespread corruption in Ukraine.
"Common sense and logic says there is probably a connection
between the events in Ukraine and this move," said one analyst
who spoke on condition of anonymity.
"It could be a signal to him (Kolomoisky) - political
games," said the analyst. "It could be a political decision or
pressure on the Ukrainian oligarch to force him to be more
negotiable in other deals."
In a statement on Thursday, Privatbank's chairman Alexander
Dubilet said that the Bank of Russia's actions "don't have
economic or other objective causes and are exclusively the
result of political tensions in relations between Russia and
Dmitry Barbayanov, chairman of Moskomprivatbank, later said
in a statement: "We are sure that the central bank will throw
its weight behind Moskomprivatbank and won't allow politicians
to break the normal regime of client service."
Analysts said it was an unusual move by the central bank to
put a bank into administration without withdrawing its licence.
"It is a very weird case from a legal point of view and
because of the absence of previous cases," said one.
The Bank of Russia declined to comment further about its