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On 18 December 2019, PrivatBank initiated the claim against its former owners and other defendants before the District Court of Tel Aviv, Israel, regarding a misappropriation scheme by which at least USD 600 million was unlawfully extracted from PrivatBank between 2007 and 2011 and transferred to a bank account held with one of the largest banks in Israel, Israel Discount Bank (IDB).
PrivatBank sues IDB as one of several defendants in Israel, claiming that IDB facilitated the misappropriation of the Bank’s funds and breached its duties to PrivatBank through enabling the obviously fraudulent transfers to be made into a bank account held with IDB in Israel, and failing to take any actions to refuse or block those transfers despite the many obvious ‘red flags’ indicating fraud and money laundering.
IDB brought motions before the Israeli court seeking to have the claim dismissed, or otherwise stayed until other claims brought by PrivatBank in England and the USA have been determined. PrivatBank strongly resisted those motions, which were heard by the Israeli court in July 2020.
On 7 December 2020, Judge Kabub of the Tel Aviv District Court in his Judgment refused IDB’s motions in their entirety, ruling that the claims brought against IDB should proceed in full, and ordering the payment of legal costs by IDB, evidencing a clear victory for PrivatBank.
PrivatBank is gratified that the Israeli court has found in its favour in dismissing the IDB motions and recognising the importance of the Bank’s claims proceeding in a timely manner and without reference to the claims in England and the USA which concern different losses suffered by the Bank arising from different fraudulent schemes to that in respect of which the Israel claim has been brought. IDB ought now to set out in full its defence to the Bank’s claims, which it has thus far tried to escape doing, including what became of the more than USD 600 million unlawfully extracted from the Bank once that had been paid into the bank account held with IDB.
As the positive progress of the claim in Israel shows, PrivatBank remains committed to seeking to recover compensation for the losses caused by its former owners through the massive, wide-scale frauds perpetrated by them over many years prior to its nationalisation.