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Tuesday 16.10.2018 | Name days: Daiga, Dinija

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

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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.»

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