September 11, 2019 / 3:32 PM / 9 days ago

Police raid offices and seize documents of Ukraine's PrivatBank

KIEV, Sept 11 (Reuters) - Ukraine’s largest lender, PrivatBank, said police had raided its headquarters on Wednesday after a court allowed them to do so as part of a criminal investigation into whether some of its officials had overstepped their authority.

PrivatBank’s fortunes are closely watched by investors as a bellwether for the business climate under Ukraine’s new president, Volodymyr Zelenskiy, who has business ties to the bank’s former owner, Ihor Kolomoisky.

The bank was nationalised in late 2016, triggering a protracted battle between Kolomoisky and the authorities. The International Monetary Fund could freeze new aid to Ukraine if the nationalisation were to be reversed.

The police raid comes a day after Zelenskiy held his first publicly reported meeting with Kolomoisky since his inauguration in May. The raid also comes in the same week as an IMF mission came to Kiev for talks on a new aid deal.

Police raided the bank’s HQ in Dnipro, the hometown of Kolomoisky, following the court ruling to check whether bank officials had exceeded their authority by concluding agreements with domestic and foreign consulting firms and advisers.

“It is worrying that, under the justification of an alleged “illegality” of recruiting companies, the district police department and prosecutor’s office are trying to seize all documents related to the legal protection of the bank,” PrivatBank said in its statement.

“The bank regards the implementation of operational measures for the forced seizure of several documents involving unjustified numbers of police special forces and unknown persons as pressure and an obstacle to the normal operation of the office,” it said.

In its own statement, police of the Dnipropetrovsk region said officers had searched three of the bank’s buildings as part of an ongoing criminal investigation into bank officials abusing their position.

Police, one cyber police official and a special regiment for ensuring security were involved, it said.

President Zelenskiy is a former comedian and actor who had no prior political experience when he decided to run for the presidency. His shows aired on Kolomoisky’s TV channel 1+1.

Zelenskiy has repeatedly denied suggestions that as president he would help Kolomoisky get back PrivatBank or win compensation for the nationalisation.

The finance ministry, which controls PrivatBank, declined comment when asked about the police raid. The central bank had no immediate comment. No further details about the raid were immediately available.

Reporting by Natalia Zinets; writing by Matthias Williams Editing by Gareth Jones

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