Ex-National Bank director’s house burns as deal suspected between Zelenskyy & top Ukrainian oligarch

Valeriya Hontareva (left) has become the enemy of Ihor Kolomoiskyi (right) after Ukraine's National Bank nationalized his Privatbank. Photo: Prestupnosti.net 

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Valeriya Hontareva, the former Head of the National Bank of Ukraine, claims that oligarch Ihor Kolomoyskyi is behind the arson of her house. No facts are available yet to support the accusation. However, Kolomoyskyi’s readiness to bargain with Zelenskyy, as well as a rally of his factory’s workers in front of nationalized Privatbank, indicate that he would support any pressure on officials to win favor for his business interests. How do those interests relate to the arson of Hontareva’s house? What might Zelenskyy and Kolomoyskyi have agreed upon at their meeting on 13 September? And how could all of this affect Ukraine’s economy?

Arson of the house: why Hontareva and why now?

The fact that somebody has declared war on Valeriya Hontareva is in no doubt. The house arson is the third act of violence against her and her property. At the end of August, she was suspiciously hit by a car in London. A few weeks later, her daughter-in-law’s car was torched in Kyiv. But why attack Hontareva now? She is out of politics and no longer living in Ukraine (Hontareva is a policy fellow at the London School of Economics).

Valeriya Hontareva in the hospital after the car hit her. Source: pozitsiya

When serving as Head of the National Bank of Ukraine (NBU), Hontareva conducted a major reform of the Ukrainian bank system, declaring insolvent and closing 76 out of 180 Ukrainian banks. Among these were the major banks of Ukrainian oligarchs Oleh Bahmatiuk and Konstantin Zhevaho, which collapsed entirely.

The culmination was the nationalization of Ihor Kolomoyskyi’s Privatbank which had been used by the oligarch and his partners to launder $5.5 billion. After the nationalization of Privatbank and its capitalization by the state, almost 200 lawsuits were filed by the National Bank against Kolomoyskyi and his partners, who pledged their companies, valued for at least 5.5 billion, against the repayment.

Practically all Ukrainian oligarchs — except former President Petro Poroshenko — are enemies of Hontareva. Any one of them might want to avenge themselves through some act of violence or intimidation.

Poroshenko stated that “this campaign is an act of revenge for Hontareva’s state and reformist stance during her management of the NBU. Her role in clearing the “Augean stables” of the Ukrainian banking system is recognized in the world, and particularly by the IMF. The arson of Hontareva’s private home is not an accident, but the result of regular public threats.”

As much as the banks resented Hontareva, her reforms were also unpopular among depositors — people whose investments exceeded UAH 200,000 lost their life’s savings in the dissolved banks. Although Hontareva was praised by the IMF for successful bank reform, she was simultaneously accused by civil society of corruption.

Activists delivered a coffin containing an effigy of Hontareva to the National Bank during their demonstration, 2018. Source: LB.Ua

Hontareva: “I have been threatened for the last five years, all the time. Now threats are coming only from Kolomoyskyi and Portnov. They were all in the public state.”


Yet, with too many coincidences surrounding this case, it’s hard to conclude that it was simply about revenge. On 11 September, the State Bureau of Investigation (SBU) conducted a search at Privatbank, then, a day later, another search at Hontareva’s apartment in Kyiv. These searches were declared necessary, and pertinent to court proceedings for alleged abuse by National Bank officials in 2016. The proceedings were initiated by Victor Yanukovych’s ally Andriy Portnov, and can finished only if Hontareva comes back to Ukraine for interrogation.

Kolomoyskyi: “We will bring her, Hontareva, if necessary … privately.”


The arson could have been arranged to frighten Hontareva, to ensure she provided the right testimony. Ihor Kolomoyskyi would find this convenient, since he wanted to see Hontareva convicted and Privatbank returned by the state.

“The car knocked her down? And Kolomoyskyi was driving? Remember, she said I threatened her by directing a plane at her? So, I want to clarify that I promised only to send a plane after her, not the car,” joked Kolomoyskyi, mocking the notion that he was behind the car accident and jibing that he would be happy to see Hontareva back in Ukraine.

Ihor Kolomoyskyi at the Yalta European Strategy conference on 13 September. Source: Radiosvoboda

Another possible explanation for the arson is related to the fact that it coincided with the arrival of the IMF mission for discussions on a new loan to Ukraine. President Zelenskyy stressed that he expects law enforcement agencies to resolve this “provocation,” as soon as possible, and instructed SBU Chair Ivan Bakanov to join the arson investigation.

Minister of Internal Affairs Arsen Avakov, stated: “Whoever ordered and executed it at the time of the IMF mission’s arrival in Ukraine is not just an arsonist, he is an enemy harming his country.” However, neither the president, nor the minister, commented on who could have arranged this provocation.

Remains of the burned house of Valeriya Hontareva. Source: Radiosvoboda

Payments on debts for cheap energy — is there any bargain between Zelenskyy and Kolomoyskyi?

The question of a bargain between Zelenskyy and Kolomoyskyi has been troubling Ukrainians since the presidential elections. The last meeting of the president and the oligarch took place on 13 September. It’s no secret that Kolomoyskyi is seeking cheap energy for his factories producing ferrum alloys, and Zelenskyy seems ready to help him out.

At the same time, Kolomoyskyi is in the process of concluding reconciliation agreements with the National Bank regarding his lawsuits. These agreements include the understanding that Kolomoyskyi’s companies, which were pledged against the Privatbank debt, will pay out the debt to the National Bank.

Is this a compromise between the state and the oligarch? Maybe, although neither the president nor the prime minister chose to clarify — except for a vague statement by Zelenskyy that appeared after the 13 September meeting with the oligarch:

“[We discussed that] everyone should operate by the rules, there will be no monopoly. For everyone, including for Mr. Kolomoisky … prices, any associated with the tariffs for utilities – there are a lot of questions – so they should go down.”

Zelenskyy did confirm that he and Kolomoyskyi discussed Tsentrenergo — a major state-controlled electric and thermal energy company in central and eastern Ukraine. The president’s cabinet has appointed a new director of the company, Volodymyr Potapenko, who almost immediately began arranging contracts favorable to Kolomoyskyi on the provision of electricity.

Recently, two major companies producing ferrum alloys, Zaporizhzhia and Arlan — both owned by Kolomoyskyi — have concluded agreements of reconciliation with the National Bank. One of the companies has already repaid the required debt to the bank, while the other is expected to do so soon.

Possible agreement between Zelenskyy and Kolomoyskyi is fragile, though, as the recent demonstration in front of Privatbank demonstrated. Ten buses of Zaporizhzhia factory workers arrived at the bank’s main office, where they demanded payment of their salaries — the factory only agreed to pay its debts to the state, at the workers’ expense.

The workers demonstrated in front of Privatbank, even though the National Bank is handling the debt payments. The difference meant little to the workers — they simply wanted what was owed them.

Oleh Serha, press secretary of Privatbank wrote on Facebook: “Privatbank is not a part of the reconciliation agreement between the NBU and the Zaporizhzhia factory of ferrum alloys, and considers the organized demonstration another attempt at pressure.”

The ironic event of the day is that Privatbank organized hot tea to warm the “protesters” who were aiming to destabilize the bank.

Tea for protesters from the bank. Source: Facebook of press-secretary of the bank.

There can be no compromise on Privatbank, authorities say

According to Prime Minister Oleksiy Honcharuk, although there are ongoing talks with Kolomoyskyi regarding doing business in Ukraine, no talks are underway for the nationalized Privatbank. The Financial Times quoted Honcharuk saying that the government is seeking a compromise on Privatbank. Honcharuk claimed he was misunderstood and posted on Facebook:

“… the Financial Times published an article, in which I comment on the Privatbank issue and allegedly emphasize that we are seeking a compromise about this issue.

To avoid further manipulations and publicity, I’d like to make my point clear. The [Ukrainian] government is not conducting any negotiations with anyone. The government is carefully studying the Privatbank situation (including negotiations with the bank’s former owners which were held by the previous, independent supervisory board).

Moreover, talking to the FT journalists I emphasized that I did not have enough information on the legal details of the case to comment. But I’m convinced that everything will be done to preserve Ukrainian taxpayers’ money and national interests of Ukraine, and it will be done after close consultations with our international partners.”

In the past, the IMF has warned Ukraine that any reconsideration of the nationalization of Privatbank will jeopardize a $3.9 billion cooperation program. The fund expects the state to continue to push for the return of $5.5 billion from former Privatbank shareholders. The funds were used by the state to rescue one of Ukraine’s largest financial institutions.

An open question remains — is the state, on the one hand, collecting the debt from Kolomoyskyi, but, on the other hand, providing cheap electricity to run his factories. Is this a quid pro quo?

Edited by: Vidan Clube

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