A case involving an alleged multi-billion pound fraud by two oligarchs at a now state-owned Ukrainian bank was ‘bizarrely’ brought in English courts as there are only tenuous links to the jurisdiction, the second day of a fraud trial heard today.

Appearing for one of the defendants Igor Kolomoisky, Mark Howard QC said claimant PrivatBank had ‘worked backwards to establish an English link’ rather than closely follow where the allegedly misappropriated money went.

PrivatBank claims that Kolomoisky, together with business partner Gennadiy Bogolyubov, misappropriated billions of pounds between 2013 and 2014 while they were owners of the bank.

Ukraine’s government took control of the bank at the end of 2016 and has claimed to have spent around £5bn trying to rectify suspected fraudulent lending and money laundering. At the end of last year, the bank applied to freeze the pair’s worldwide assets and demanded nearly $2bn (£1.5bn) plus interest from the men.

As well as Kolomoisky and Bogolyubov, six companies - of which three are listed in the UK - are also defendants. It is alleged that at one time they were owned by either of the two men.

However, Howard submitted that the companies’ involvement was limited and that they were only being named as defendants so that the case could be brought in the English courts.

‘When you look at the total amounts of alleged misappropriation they [the English companies] received comparatively very little ($240m of $1.9bn). They were also not involved at all for large periods of this alleged misappropriation.’ Howard said the bank had ‘no real interest’ in suing the companies and that the ‘real target’ was Kolomoisky.

Describing the ‘nuclear weapon effect’ of a freezing order Howard warned the court to note that international litigation often generates ‘huge publicity’ and that Kolomoisky is a ‘very public figure’ who has had ‘public spats’ with Ukrainian president Petro Poroshenko and Vladimir Putin.

According to a particulars of claim, the bank made a series of loans to borrowers totaling tens of millions of pounds despite the fact the borrowers were all linked to, or affiliates of, the men and had no prospect of repaying the loans.

PrivatBank is represented by Hogan Lovells, international firm Fieldfisher is representing Kolomoisky, Bogolyubov is represented by US firm Skadden while the six companies are represented by Pinsent Masons.