A Ukrainian court seized the main office of State Development Corp. VEB.RF's local unit PSC Prominvestbank and other real estate owned by the lender at the request of the Ukrainian Prosecutor General's Office, Interfax-Ukraine reported Sept. 16.
According to Ukrainian prosecutors, Prominvestbank officials have been acting in concert with unidentified persons to take over the lender's property, liquid assets and cash to reduce its liquidity and depreciate its shares, the news report noted.
Prominvestbank shares were seized earlier and were put up for sale via an auction by one of the companies associated with Ukrainian investor Ihor Kolomoisky as part of court proceedings to receive compensation from Russia for assets it seized during the annexation of Crimea in 2014. However, no investor applications were filed to participate in the Aug. 28 auction.
Additionally, VEB secured a ruling from the Arbitration Institute of the Stockholm Chamber of Commerce banning attempts to sell the shares and mandating Ukraine to compensate it for all arbitration costs borne by the Russian state corporation.
VEB launched arbitration proceeding against Ukrainian authorities in June, arguing they have been infringing an investors rights protection agreement with Russia by discriminating against Russian investors and implementing a policy "aimed at the destruction of the business of Russian banks," Russian media outlets reported at the time.
