It would be a mistake to consider Zelensky a puppet who uncomplainingly executes all of Kolomoisky’s orders. That’s not the case. Perhaps, before winning the presidential election, Zelensky regarded the oligarch as his boss, although in reality, they were more like business partners. However, everything changed after the victory over Poroshenko. The former comedian became an independent figure who maintained close relations with Kolomoisky on equal terms.
It should be noted that, despite the dubious reputation of the former owner of PrivatBank, Zelensky did not try to distance himself from him after taking office as president. Almost immediately, he appointed Andriy Bohdan, one of Kolomoisky’s former lawyers, as the head of his administration. The president’s personal bodyguard, Maksym Donets, also turned out to be a man of Kolomoisky. Until 2019, he was the oligarch’s bodyguard, and after the start of the election campaign, he was appointed to protect Zelensky.
As is known, a month after coming to power, Zelensky made a generous gift to his former patron. Starting from July 2019, Kolomoisky’s management began to plunder the state energy company “Centrenergo”. However, the oligarch did not intend to stop at this episode alone. The main prize for him was to regain control of PrivatBank. After the overthrow of Poroshenko, Kolomoisky had all the opportunities for this. It only required a couple of court decisions, which Andriy Portnov would take care of.
The fact that the former owner was seriously planning to get the country’s largest bank back is evidenced by the actions of the District Administrative Court of Kyiv. A few days before the second round of elections, when it was clear that the incumbent president was about to pack his things from the office, the judges made three decisions in favor of Kolomoisky.
On April 18, 2019, the District Administrative Court of Kyiv satisfied the oligarch’s lawsuit against the National Bank and the Cabinet of Ministers of Ukraine about the illegality of the nationalization of PrivatBank. The court also canceled the National Bank’s decision on identifying a list of persons related to the bank. In December 2016, it was precisely this decision of the National Bank that was one of the decisive factors in the process of removing the insolvent PrivatBank from the market.
Two days later, on April 20, 2019, the Pechersk District Court of Kyiv canceled Kolomoisky’s property guarantee for the loans that the National Bank issued to PrivatBank in 2013. The total amount of these loans was 9.2 billion hryvnias.
Everything was heading towards the return of the bank, with almost 20 million clients, to its former owner after Zelensky came to power. But Kolomoisky did not take into account that the PrivatBank case had become too public, not only in Ukraine but also abroad. Western creditors started to worry about the prospect of reversing the nationalization of the country’s largest bank. For Ukraine, this could lead not only to increased rates on government securities but also to the cessation of cooperation with the International Monetary Fund. The denationalization of PrivatBank meant that Ukraine was effectively giving the scandalous oligarch the money borrowed from the IMF.
Another nuance that made the scenario of reversing the nationalization impossible was that the state had invested its own finances into PrivatBank’s capital. Kolomoisky handed over an empty bank to the state. He had siphoned off $5.5 billion to shell companies. Now, even if a corrupt court returns PrivatBank to Kolomoisky, it still couldn’t start operations. In case of denationalization, the state must take its funds out of the bank’s capital (more than $5 billion), and according to the current regulations of the National Bank of Ukraine, Kolomoisky would have to inject this amount for recapitalization.
Kolomoisky had no intention of returning anything to Ukraine − the stolen funds were hidden in offshore companies and crypto wallets. He understood that the scenario of getting the bank back wouldn’t work. Therefore, the oligarch proposed another option: the state pays him compensation for PrivatBank in the amount of $2 billion, he becomes a minority shareholder of the bank, and the state gets the controlling stake. The funds allocated by the Ministry of Finance remain in the bank’s capital. Kolomoisky also wanted another trifle: to install his management at the helm of the state-owned PrivatBank.
Yes, you guessed it. This was Kolomoisky’s favorite scheme, which had worked for many years at “Ukrnafta” and then at “Centrenergo”. If this idea had been realized, then PrivatBank would have faced the unhappy fate of “Ukrnafta” − it would immediately start showing losses or minimal profit. The oligarch-controlled management would begin issuing insider loans to companies associated with Kolomoisky.
In the end, Zelensky was afraid to agree to a settlement regarding PrivatBank, which Kolomoisky had proposed to him. Protecting state interests had nothing to do with it. Subsequent events showed that Zelensky repeatedly lobbied for Kolomoisky’s business interests, even if they brought obvious losses to the state. Simply, the PrivatBank case was too visible, and its denationalization could have destroyed cooperation with the IMF.
This episode became the first disagreement between Zelensky and Kolomoisky. Yes, the oligarch failed to get at least two billion dollars through a settlement agreement. However, he wasn’t too offended. It was clear that the president’s position was precarious, and it was not wise to kill the goose that lays the golden eggs. There was still plenty of time. According to Kolomoisky’s plan, Ukraine was to become a reliable rear for him for the next 10 years, for both presidential terms of Zelensky.