Reluctant to pay $350, a London court froze $1 billion in assets belonging to Boholyubov.

The High Court of London has made a ruling that sheds light on the financial manipulations of former PrivatBank owner Gennadiy Bogolyubov. According to the court's decision, due to the businessman’s inaction, assets worth over 1 billion dollars were lost. These losses resulted from the non-payment of registration fees for companies registered in the British Virgin Islands (BVI), leading to their removal from the registers. More details can be found in the article.

What Happened

The High Court of London has ordered ex-owner of the Privat group, Gennadiy Bogolyubov, to take steps to reinstate the operations of 21 liquidated companies in the British Virgin Islands and to provide a report on this.

These companies, according to the court's ruling, owned assets valued at around 1 billion dollars. However, due to their removal from the registers, access to these assets has been blocked.

Formally, they now belong to the government of the British Virgin Islands, although their seizure was initiated by PrivatBank. The total amount of claims by this state bank against its former owners reaches 10 billion dollars.

The reason for the companies' removal from the registers was Bogolyubov's refusal to pay registration fees, which, according to the court, are relatively small amounts. Now the court has effectively required him to cover part of the fees for his partner, Igor Kolomoyskyi, who is currently in custody in Kyiv. The ruling states that Bogolyubov could have prevented the liquidation and then sought compensation from Kolomoyskyi for the expenses.

As is known, back in 2017, the High Court of London issued an order for the global seizure of assets belonging to Kolomoyskyi, Bogolyubov, and six companies amounting to 2.6 billion dollars. With interest accruing at a rate of 500 thousand dollars per day, the total claims have increased to 4.2 billion dollars.

The court also ordered the former owners of PrivatBank to disclose information about their assets to a limited number of individuals, including lawyers, and restricted their expenses to 20 thousand pounds per week. However, due to Bogolyubov's inaction, there is a risk of losing 1 billion dollars that are under global seizure.

How the Offshore Scheme Works

The Privat business group had a layered ownership structure. The Ukrainian companies of the group were owned by Cypriot companies, which in turn were owned by offshore firms in the British Virgin Islands or Belize. These offshore firms were owned through nominal holders, or in simpler terms, front persons, for Bogolyubov and Kolomoyskyi.

As part of the global seizure order for the assets of Kolomoyskyi and Bogolyubov, which was imposed during the High Court proceedings regarding PrivatBank's lawsuit, a seizure was placed on companies that are directly or indirectly owned by the oligarchs, including the Borivazh port, whose credit obligations were sold for nearly half the market value.

Thus, island offshore companies that fail to pay the registration fee, which in the British Virgin Islands amounts to a mere 350 USD per year, get removed from the register — obtaining inactive status. This means that they cannot be seized, and therefore, their owned assets are also protected from seizure. These companies hold assets worth over 1 billion USD.

As a result, PrivatBank may win the lawsuit in London, but it will be unable to recover assets because the companies are removed from the register. However, there is one caveat.

In the British Virgin Islands, as well as in Belize, it is possible to restore the operations of companies removed from the register even after 5-10 years by simply paying the outstanding registration fee. In other words, by not paying a nominal 10,000 dollars in registration fees, Bogolyubov is effectively trying to conceal assets worth over 1 billion USD. After 5-10 years, Bogolyubov and/or Kolomoyskyi will likely pay the fee and restore their ownership rights.

Nevertheless, Bogolyubov's and Kolomoyskyi's attempts to evade justice are unlikely to be limited to just the removal of offshore companies.

As previously reported by RBC-Ukraine, citing former PrivatBank shareholder Oleksiy Marinov, they are trying to hide the remnants of their assets from English justice. For instance, the Borivazh port, valued at over 341 million USD, is linked to a company associated with another well-known businessman — Serhiy Tigipko, through the purchase of credit obligations in PrivatBank.

However, unlike the Ukrainian judicial system, the English court's ruling once again underscores the importance of business transparency and owner accountability. Despite the complexity of the schemes and their international nature, modern judicial mechanisms allow for the fight against financial manipulations even on a global scale.