Big Four auditor PwC has promoted its Ukraine partner Oleg Tymkiv away from the firm’s core business in the country, announcing the move in a March 22 press release.
The decision came in the wake of a scandal over PwC’s auditing of PrivatBank, Ukraine’s biggest bank by assets. The government nationalized the bank in December after discovering a Hr 148 billion ($5.5 billion) hole in the bank’s books and records.
The changes come as part of a bureaucratic change within PwC’s structure, moving Ukraine into a “northern cluster” of countries that include the Baltic states. Tymkiv will manage “strategic projects including important new inward investors to the region” in his new role within the cluster.
Notably, that means he will likely be moved away from managing clients within Ukraine.
The shift comes as Ukraine’s National Bank has contemplated legal action against PwC over what it sees as fraudulent evaluation of collateral in PrivatBank’s loanbook.
“I’m proud of the work being done here,” said Olga Grygier-Siddons, PwC central and Eastern Europe chief executive. “PwC Ukraine is a strong business, forging enduring relationships and bringing value to major stakeholders during a period of economic challenge and uncertainty.”
Billionaire oligarch Ihor Kolomoisky founded the bank in March 1992, and owned it with his business partner Gennadiy Boholyubov until its December 2016 nationalization.
Richard Pollard, an executive at the firm’s Central and Eastern Europe division, will take over PwC’s Ukraine practice in Tymkiv’s place.
When asked if the move came in response to the PrivatBank audit, PwC-Ukraine spokeswoman Ksenia Vardzelova said, “this is driven by our global and regional strategy in order to better serve our clients.”
National Bank Governor Valeria Gontareva said last week that 100 percent of PrivatBank’s loan book consisted of insider loans. The Ukrainian government has had to issue Hr 116.8 billion ($4.3 billion) in treasury bonds to finance the stabilization of the bank. Gontareva said that a total of Hr 146 billion ($4.5 billion) will be needed to fully stabilize the lender.
The problems were not new – NBU insiders were aware that the vast majority of the bank’s loan portfolio was to related parties for more than a year before it was taken over. Rumors that the bank was a giant vacuum cleaner, used to suck Ukrainians’ deposits into Kolomoisky’s businesses, had persisted among businessmen in Ukraine for years before.
In the announcement, Tymkiv gave a thank you to the firm’s “great team in Ukraine and to our clients for their trust in us over the past two years.”
Ukraine will spend years paying off the billions of dollars worth of debts accumulated by PrivatBank.
“I am excited about the opportunity to contribute to the growth of our practice across both here and in our expanded Northern Cluster,” Tymkiv added.
