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Monday 19.03.2018 | Name days: Jāzeps

ABLV Bank: 300 people to lose jobs next week; construction of New Hanza Quarter disrupted

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUNext week, 30% or 300 people will lose their jobs in ABLV Bank, as confirmed by the bank’s chairman Ernests Bernis. Among those people are highly-qualified workers – financiers, marketing specialists and others. The bank’s representative adds that this means families that have a total of 700 children under the age of 12 will suffer lay-offs.

The credit institution currently has more than 900 employees.

«The decision to commence liquidation was made independently from us. We had to make a decision that would protect the business. This is why the decision has been made to self-liquidate. This was the toughest decision in my life. It has effectively erased the work we have done over the past 25 years,» said Bernis.

The bank’s chairman emphasized that the bank’s council agreed on 26 February meeting to perform all the necessary measures to disprove the report published by FinCEN and restore their reputation.

ABLV Bank co-owner and council chairman Olegs Fils has said «it is hard to believe what has happened». He promised the bank’s board will do all it can to supervise everything that applies to liquidator work.

Explaining why the bank decided in favour of self-liquidation, Bernis said this is the board’s way of protecting the bank from unprofessional activities. It is also emphasized that all matters regarding the bank’s future will depend on liquidators that will manage this process.

The bank’s representatives say they still have to submit the self-liquidation plan to the Finance and Capital Market Commission within the next five days. FCMC plans to review this matter within 30 days. While the evaluation and approval of liquidators continues, the bank’s board will continue working as usual.

ABLV Bank has proposed candidates for the liquidation group. Among the candidates are Elvijs Vēbers from Elvijs Vēbers un partneri sworn attorneys office, New Hanza Capital chairman Andris Kovaļčuks and board member of ABLV Corporate Finance Arvīds Kostomārovs. Liquidator candidates are to be approved by FCMC.

In relation to ABLB Bank’s funded projects and subsidiaries, their operations will be ceased or remain dependent on the liquidator.

«It is clear than what has happened puts our efforts to build New Hanza Quarter in Riga on hold. We had planned to invest up to EUR 1 billion in this project. Office buildings, school, park and other locations will be frozen. Construction work has been ceased and cooperation with all sub-contractors has been put on hold. Of course, we will pay for all services once the opportunity rises,» said Oleg Fils.

On 23 February, European Central Bank made the decision to now save the bank and instead commence liquidation.

Following ECB’s instructions, FCMC applied payment restrictions on ABLV Bank on 19 February. Because ECB gave no instructions to lift restrictions, FCMC decided on the night to 24 February that unavailability of deposits took place in ABLV Bank.

ABLV Bank admits the decision made by FCMC means liquidation process will soon commence. ABLV Bank links the commission’s decision with political reasons.

Problems for ABLV Bank started when Financial Crimes Enforcement Network (FinCEN) of US Department of Treasury announced in the middle of February that it plans to establish sanctions against ABLV Bank for money laundering activities that had assisted with North Korea’s nuclear arms programme, as well as illegal activities in Azerbaijan, Russia and Ukraine.

The report published by FinCEN details that until 2017 the management of ABLV Bank had been using bribery to influence officials in Latvia in an attempt to avoid legal action and threats to its high-risk operations.

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