Latviski English По-русски
Sunday 22.07.2018 | Name days: Marija, Marika, Marina

De Facto: ABLV Bank’s self-liquidation – controlled or not so much?

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RU«Controlled self-liquidation» – this is the undefined procedure Finance and Capital Market Commission has picked for ABLV Bank. This decision came after three months of document assessment, discussions with politicians and active media campaigns, as noted by De Facto journalists.

De Facto says the commission had to find balance between two sides: concerns about possible attempts to rob the bank during the insolvency process and concerns about dirty money flowing uncontrollably from the bank. Unfortunately, it is currently unknown how the commission intends to prevent either of those risks.

In the announcement for ABLV Bank’s self-liquidation, FCMC mentioned multiple times that it will be a «controlled self-liquidation». The word «controlled» was not picked by chance, said FCMC Chairman Pēters Putniņš: «A classic self-liqiudation is when shareholders decide, pick administrators, ensure financial indexes, complete the process and cross the company from the Enterprises Registry. This process will be far from that.»

This is not a typical case, because there will be a great deal of control over the bank’s appointed liquidators, said Putniņš, adding that control will not be excessive. «I think there will be no exaggerations, because we don’t need an absolutely extensive approach. It is far more important for everything to be done well. We are confident depositors that have no problems with money laundering prevention procedure will get their money back.»

Although officially FCMC explains the long decision-making process with experts’ patient work, Putniņš does not deny having to discuss the matter with politicians to convince them of the commission’s stance. De Facto noticed that Putniņš was an often guest to the Cabinet of Ministers. On Tuesday, 12 June, the chairman of FCMC had a meeting with Prime Minister Māris Kučinskis’ office manager Māris Krastiņš.

De Facto adds that the prime minister denies that there had been any disputes between the bank’s administrator and the government: «The question is more about ensuring monitoring, because, assuming Mr Putniņš had come sooner, before this mechanism was not only formed but also explained to me, ministers and our partners [in USA], with whom I had met last week, it would have been much harder to achieve our goal – recovering reputation, I mean».

It was especially important to convince Finance Minister Dana Reizniece-Ozola that ABLV Bank’s self-liquidation is permissible. She admits this: «Yes, because a couple of weeks ago we had no clear mechanism to ensure money laundering control. Things are much better now. As I’ve said, we have reached an agreement. This includes attraction of funding for the Anti-Money Laundering Service to ensure independent and professional monitoring. Consultants that will be helping the service will be paid not from funds owned by bank owners like other liquidators and their businesses or partners attracted during the process, but from the state budget to guarantee full independence for the Control Service.»

The minister believes that certain businessmen from neigbouring countries «have used our country’s financial system. Their partners in Latvia have launched an information campaign to ensure the quickest possible self-liquidation for ABLV Bank with as less control as possible.» She did not mention any names, however. Nevertheless, the minister and the prime minister both said the Dienas bizness is involved.

De Facto adds that official owners of Dienas bizness include Jānis Maršāns and Jānis Svārpstons, who are also managers in multiple companies associated with Andris Šķēle’s and Ainārs Šlesers’ families. Maršāns denies the campaign – it was allegedly the newspaper’s fight for justice and against insolvency administrators to keep their businessmen readers happy.

When asked if either Šķēle or Šlesers have supported the newspaper’s attempts in any form, Dienas bizness board member and co-owner Maršāns said: «I will say this again – we have no support. At this time, we have fought […]. I’d rather not mention any specific names. We have many businessmen, many,» said ABLV Bank co-owner Ernests Bernis in an interview to Viens pret vienu programme of LTV programme. He also denied relation with Dienas bizness series of articles.

The new head of the Anti-Money Laundering Service Ilze Znotiņa says discussions about two extremes were artificial: «I would like to add clarity to this whole situation – it is likely for very specific reasons we were told there are only two solutions: insolvency or self-liquidation. But the law provides a third option: court-controlled liquidation, which provides a great deal of mechanisms for us to use to avoid the previous two options.»

De Facto adds that now that FCMC has decided in favour of self-liquidation, the Control Service is committed to making sure no dirty money leaves the bank. This is why it is necessary to hire experts from the side, explains Znotiņa. «It is similar to when, for example, a pipe bursts in our home. We can easily fix that ourselves. In our case, the Control Service lacks the capacity to revolve a problem of this size on its own. Nevertheless, we have to do everything well; we have no room for half effort.»

Leave a reply

SRS: cash register reform still stagnates, but has become much faster than it was last year

The cash registers reform continues stagnating. However, it has become much faster than it was a year ago, as reported by State Revenue Service.

Specialists to search for solutions to topical environmental problems in Ventspils

On Friday, 20 July, a meeting was held between Ventspils Commercial Port representatives and specialists from State Environment Service.

Children with functional disorders to receive services financed by EU funds

Child invalids will have access to social services intended to improve their social skills and mobility. More than EUR 4.2 million has been allocated for this goal from the European Social Fund, as confirmed by Latvia’s Central Financing and Contracting Agency.

Producer price level in industry up 4.3% in Latvia

Compared to June 2017, the average level of producer prices in Latvian industry increased by 4.3 % in June 2018. Prices of products sold on the domestic market rose by 4.8 % and those of exported products by 3.7 %.

Total tax debts in Latvia in July – 1.212 billion euros

At the beginning of July total tax debts in Latvia, including outstanding debts, halted debts and debts applied with repayment term extensions, accounted for EUR 1.212 billion, which is 0.8% less than a month prior, according to data from the State Revenue Service.

Survey: every third Latvian resident has received illegal loan offers

Nearly every third resident in Latvia or 31% of respondents admit having received offers to use illegal loan services, as concluded in a survey performed by Latvian Alternative Financial Services Association and SKDS.

Libya opposed to EU's idea to establish migrant centres in North Africa

Libya is against the solution of the European Union to set up migrant centres in the North African country as a means to keep migrants from arriving in the bloc and Libya would not be convinced with financial support, its Prime Minister Fayez al-Sarraj has noted.

Arrest warrant on Catalan ex-President cancelled by Spain

The Supreme Court of Spain cancelled a European arrest warrant for former Catalan regional leader Carles Puigdemont, as Germany refused to extradite him to face accusations of rebellion for declaring the independence of Spain's region, Catalonia in 2017.

Latvian government plans to allow handing expired food to charity

Latvia’s Agriculture Ministry has prepared amendments to the Law on the Supervision of the Handling of Food that provide permission to hand over certain types of food products to charity after the end of their expiry date.

Estonian industrial producer prices up 2.9% since June 2017

Estonian industrial producer price index has risen by 2.9% between June 2017 and the first summer month this year, resulting in an increase of export prices as well, Estonian statisticians have estimated.

Putin urges NATO to quit «irresponsibly» developing ties with Ukraine, Georgia

Russia's President Vladimir Putin cautioned NATO against developing deeper relations with Ukraine and Georgia, evaluating such a policy was irresponsible and would have consequences for the military alliance.

Latvian parliament not in a hurry to support president Vejonis for a second term

Political parties represented in the Saeima are not eager to support President Raimonds Vējonis for his remainder for a second term.

Weather in Latvia will remain warm and even hot at times

Weather in Latvia in the nearest couple of days will be dictated by a cyclone. Because of that the sky will be partially covered by clouds; thunderstorms are also expected, as reported by State Environment, Geology and Meteorology Centre.

Hungary sued in EU Court for criminalising help to illegal immigrants

The European Union's executive body has stated that a law in Hungary that criminalises support for illegal immigrants is in breach with EU law and Hungary has now been referred to the European Court of Justice for the alleged non-compliance.

Estonians buy alcohol in Latvia; country loses EUR 20 million in six months

Latvian stores located close to the Latvian-Estonian border have sold 1.6 million litres of strong alcoholic drinks in the first half year of 2019. This means Estonia has lost more than EUR 20 million in taxes, according to data from Association of Estonian Alcohol Producers and Importers.

Lithuania’s election watchdog slams ruling LFGU over popular TV series

Political messages can be channeled in various ways and the ruling now Lithuanian party, LFGU has chosen a very delicate way of the communications – through a TV series featuring the beauty and the ambiance of Naisiai, a picturesque settlement in Siauliai district.

Association: around 3,3000 people know of their HIV infection but receive no treatment

HIV remains a serious problem in Latvia – around 3,300 people are aware of their status but receive no treatment and continue spreading the infection. Because of that, it is necessary to act quickly for Latvia to lose its status as HIV kingdom and limit the spread of the infection, says Baltic HIV Association, informing decision-makers and responsible officials in institutions and hospitals about the HIV/AIDS situation.

Driver shortage may force reduction of international road haulage volumes

Latvia’s road haulage companies have started experiencing shortage of drivers. On top of that, if employment conditions for residents of non-EU member states do not change, it may be necessary to reduce the volume of road haulage volumes, says Latvijas auto president Valdis Trēziņš.

Lattelecom’s turnover up 9% in first half-year of 2018

Lattelecom Group’s turnover reached EUR 98.7 million in the first half-year of 2018, growing by 9% in comparison with the same period of 2017, according to unaudited financial results.

1,140 fewer births registered in Latvia in 2017

Since 2016 the number of births in Latvia is declining again. Compared to 2016, a total of 1,140 births fewer were registered in 2017. Also, the provisional number of births registered over the first six months of 2018 (9,664 children) is by 664 children smaller than that registered over the respective period of 2017.

Citadele Bank decides to reform Lithuanian subsidiary as a branch office

Citadele Bank has decided to reform its Lithuanian subsidiary as a branch office, as confirmed in the statement the bank submitted to Nasdaq Riga.

Russian pension age hike discussed amid protest outside Duma

As the Russian paliament votes on the proposal to gradually increase he pension age to 65 for men and 63 for women, some 200 people were seen protesting against the reform in Moscow.

Corruption watchdog chief says bureau has done no illegal actions

After going through Corruption Prevention and Combating Bureau’s past investigative activities, the bureau’s chief – Jēkabs Straume – found it confusing that officers often took no appropriate actions after acquiring evidence or receiving indications regarding necessary steps.

Illegal border crossings to Estonia on rise after Russia World Cup

Football fans with temporary residency permits of the Russia World Cup, or fan Ids, are trying to illegally cross the Russian border with Estonia, a member of the European Union.

Estonian 13-year-old lethally overdoses fentanyl

Estonian prosecutors have accused a 15-year old of negligent homicide after a girl, 13, passed away from fentanyl overdose.