We decided that it is necessary to talk in more detail about the assets of Igor Kolomoisky's “Privat” group. Some of them are constantly in the spotlight, some — periodically. There are those which mentioned regularly, but the information about them are still not very clear. “Privatoffice” LLC is a company from wich we decided to start our cycle.
“Privatoffice” LLC is periodically mentioned in the news about the courts around Privatbank — the arrest of hundreds units of real estate, lifting of the arrest, appeals and other legal vicissitudes. But its functionality in the business of the group "Privat" has never been adequately described.
Prior to the nationalization of Privatbank, the firm was part of the structure of the banking group of Privatbank — quite officially, it was indicated in the ownership structure.
After the nationalization, “Privatoffice” began to be mentioned in the news — the court arrested the real estate of the company, which has 415 premises on its balance sheet, but more recently the court lifted the arrest. Where does so much property in one ordinary LLC come from? The question is somewhat complicated. And 415 (or 353, according to our extract) real estate objects does not give any clarity.
But you can understand the essence of the company's affairs, if we will study the court register of the times before the nationalization of Privatbank. First of all, it was a company-tenant of land plots, where the bank's offices were built from scratch – in Uzhgorod or Ternopil. Secondly, the bank's premises were also registered on “Privatoffice”. Here, for example, is the case where in the village of Rzhyshchiv, Zhytomyr region, the building owned by “Privatoffice” iis mentioned — and there is still a bank office.
As a matter of fact, a large part of the bank offices that we visit every day (or weekly) are still owned by “Privatoffice”, and Privatbank is only a tenant. Because of this, after the nationalization in the courts, many cases of debt collection for rent, as described below.
But “Privatoffice” owns not only premises purely for banking. “Privatoffice” actively bought real estate if it believed that the offer was profitable. In the register of court decisions it is possible to find criminal proceedings according to which in the premises bought by “Privatoffice” the illegal hall of slot machines was exposed. But the vast majority of cases — just business litigation, which mentions that the company was a buyer of real estate or its landlord.
We have not found evidence that the real estate that Privatbank took from insolvent debtors as collateral was then transferred to “Privatoffice”. But this option is quite possible, it is indicated by the old name of the company — "Bureau of Credit Histories".
In general, why is this so and is this legal?
This was done for tax optimization according to the law. The bank pays rent for the premises to "Privatoffice", can attribute this to the costs, and reduce the tax base. Another aspect how is this kind of tax reduction corresponds the world standards? For example if among the world-class investment funds would be a buyer who are ready to buy a stake in Privatbank, the detection of such a scheme in the due diligence phase would lead to considerable complications in the negotiations. After all, the bank's fixed assets do not actually belong to him.
But the bank has been privatized not by investment funds during a year or two, but by the state for in a period of one month. And it turned out that "Privatoffice” was among the companies through which refinancing funds were withdrawn. When Ukraine provided billions of UAH of refinancing to Privatbank in 2014-2016 so that the systemic bank would stay and not bury the country's financial system with it, these funds went to "garbage loans".
The specific history of withdrawal through "Privatoffice” was connected with loans of the companies that were its founders. These are “Okeanmash” LLC, “Taylon” LLC, “EL TI Group” LLC, “Agency Novyi Svit (New World)” LLC, “Freeline” LLC, “Zernopostavka-m” LLC, “Kandella” LLC, “OPF” LLC, LLC “Elara”, LLC “Public service of houses”. All of them received soft loans from Privatbank with a loyal interest rate of 9% per annum, with the average cost of the then credit resources at 17%, 373 million UAH in total.
The subject of the pledge was the corporate rights of these companies — 25% of each LLC. The guarantor of the agreements was "Privatoffice”, which should have given these shares to the bank in case the debtors did not repay the loans. That is, a related firm that has been officially named by a member of a banking group — see our first screen — guarantees to the bank that other affiliates that have taken out a soft loan will repay it. Or it will give away the shares of these companies, which are its founders. You ask — wait a minute, and where is the real pledge? This is just air not a pledge! Yes you're right. These were manipulations with the air.
The objects of the pledge were not these hundreds of premises, buildings, plots that were on the balance of "Privatoffice” — but only abstract corporate rights. This is called "garbage credit".
When criminal proceedings began in 2017, after the nationalization of Privatbank, all real estate of "Privatoffice” was arrested. Unfortunately, two and a half years later, in the summer of 2019, the arrest was lifted. The Pechersk District Court decided that "the arrest was made without evidence of the proportionality of the value of the immovable property seized, with the amount of damage caused by the criminal offense."
We made an extraction from the register of property rights to understand what is now registered at "Privatoffice”. The main news is that the companies no longer have 415 real estate objects, as indicated in the criminal proceedings, but only 353. So in less than a year a considerable part of the real estate has already been removed from the balance of "Privatoffice” and it is quite hard to track. The only ones that left are bank premises, land plots and not very liquid assets — warehouses, and so on.
The full list of real estate in Google spreadsheet format is available at the link.
But this property is not the only problem with "Privatoffice”. He still owns a significant number of premises of Privatbank, lease agreements are valid. "Privatoffice” demands to pay for the rent, "Privatbank" answers — "no, you owe us money anyway, because of you the money was withdrawn from the bank." And they go to court. Unfortunately, "Privatoffice” almost always wins.
Why so? Because in three years the Prosecutor General's Office has done almost nothing to bring the criminal proceedings against «Privatoffice” at least to the court with specific defendants, not to mention the verdict. And when the bank says that we demand that this lease debt and withdrawn funds be treated as counter homogeneous claims, and the lease be deducted from the amount of withdrawn funds, the court asks — is the withdrawal of funds recognized by another court decision? Or in a commercial court decision, or in general a criminal sentence? No, because in the economic case this case is dragged on indefinitely, and the criminal proceedings were sabotaged by the prosecutor's office. Well, then we can't admit that you had a settlement, the court says, and makes a decision in favor of «Privatoffice”. And these decisions happen several months, under each lease agreement.
This story is only a small segment of Kolomoisky's shadow empire, which we are beginning to tell. But even in such a "technological" and secondary segment, millions of UAH are circulating — as you have already seen.