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Administrator fight: who will be in charge of ABLV Bank’s liquidation?

Photo: АBLV Bank.
Current laws provide that the post of the person who will lead the bankruptcy process for ABLV Bank will be very profitable. Candidates are currently being considered. It should be added that ABLV Bank’s credit portfolio had exceeded EUR 2 billion in 2017, as reported by Nekā personīga.

Finance and Capital Market Commission (FCMC) will provide the court with the name of the bank’s insolvency administrator. When selecting candidates, FCMC relies on candidate proposed by Latvian Council of Sworn Advocates and Latvian Association of Certified Auditors. The programme found out that the Council of Sworn Advocates gas proposed a total of five candidates: Aleksadrs Berezins from Berezins and Juraša law firm, Aldis Saulietis from Sjademe un Saulietis law firm, as well as Mareks Diks, Valdis Ulmanis and Jānis Bērziņš.
 

A new meeting of the Council of Advocates will be organized next week to discuss ten candidates in total. Among potential candidates could be the assistant administrator of Trasta komerbanka Mārtiņš Bunkus, administrator and advocate Vigo Krastiņš, manager of Insolvency Administrators Association Jānis Kumsārs, advocates Aivars Lošmanis and Gints Vilgerts. One other candidate is Raivo Sjademe, who is known to have protected interests of ex-politician Andris Šķēle.
 

The bank’s liquidator will be paid percentage of enforced funds. To make sure this person does not become a multimillionaire, the finance ministry has prepared amendments to the law that at least somewhat limit the liquidators’ income. Finance Minister Dana Reizniece-Ozola comments: «One proposal would be not taking into account the bank’s assets when calculating the administrator’s remuneration. Remuneration would be paid only for assets that should be enforced through legal means.»
 

On Saturday, 24 February, FCMC chairman and member of the European Central Bank’s supervisory committee Pēteris Putniņš announced there would be no delays with payment of deposits. It should be said that on the night to Saturday FCMC concluded that ABLV Bank has unavailability of deposits.
 

Both the minister and FCMC supervisor emphasize that ABLV Bank collapsed not because of financial, but rather reputation problems. Experts also mention that USA would not have applied sanctions on the bank if FCMC had punished the bank for its indirect transactions with North Korea in 2017.
 

Putniņš explains that FCMC had applied fines on the bank for money laundering activities in 2016. After that, FCMC announced it would be more lenient towards the bank. Restrictions FCMC had imposed on itself prevented the institution from punishing ABLV for violations associated with North Korea in 2017. The vote on not punishing the bank was not unanimous.
 

Closure of ABLV Bank made people question the security of banks whose operations are mainly associated with non-residents. The finance minister announced on Saturday that this business has no future – if banks want to keep doing business, they should dispose of risky clients. And this should be done within the next two years.
 

According to information from Bloomberg, most of ABLV Bank’s clients hail from Russia (43%), followed by Ukraine (21%). There is an odd transaction associated with Ukraine. It turns out, the bank was used by US President Donald Trump’s former advisor Paul Manafort, who also serviced ex-president of Ukraine Viktor Yanukovich. This information was confirmed to Nekā personīga by an individual closely associated with ABLV Bank.

BNN

26-02-2018
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