Former Krājbanka board faces prospect of paying 15 million euros

Take note – story published 4 years ago

Former members of the board of defunct bank Latvijas Krājbanka (Latvian savings bank) face the prospect of having to find around 15 million euros between them as a result of failures of oversight while they were supposed to be ensuring the bank was run in a proper manner, reported Latvian Radio April 28.

Embarassingly for the government, among the seven defendants in the frame for the massive pay-back include Saeima deputy Mārtiņš Bondars (Development/For!) who is now the head of the Saeima budget and finance (taxation) committee. Bondars was formerly chairman of the board at Latvijas Krājbanka, which went spectacularly bust in 2011 and also ran a short-lived campaign to become Latvia's president in 2015.

A Rīga court ruling has backed a request by insolvency administrators KPMG to recover the money, based on the bank's decision to approve two loans, which, in the opinion of the administrator, should not have been granted. The first was a EUR 2.4 million loan to a company registered in the Netherlands Antilles for the purchase of a yacht, and the second was a loan of more than EUR 20 million for real estate development in St. Petersburg. Both transactions caused losses to the bank and according to administrators can be linked to the bank's then owner, Vladimir Antonov.

The case has been running for years, but now the Senate of the Supreme Court refused to initiate cassation proceedings. Consequently, an earlier judgment of the regional court, which was appealed in this case, enters into force. 

As previously reported by LSM, Latvijas Krājbanka was dragged down by the collapse of parent company Snoras bank in Lithuania, both banks being owned by Antonov who subsequently fled to the UK and then Russia as Lithuanian law enforcement pursued him.

As Latvia's oldest commercial bank, many depositors were shocked by the collapse of Krājbanka, despite frequent questions raised in the press concerning the business activities of Antonov and his associates.

On November 21, 2011, the Latvian financial watchdog, the Financial and Capital Market Commission (FKTK) ordered Latvijas Krajbanka to suspend all financial services. The decision was made due to a shortage of assets discovered at the bank, and a criminal investigation was started.

The Riga Regional Court declared Latvijas Krajbanka insolvent on December 23, 2011. On May 8, 2012, the court ruled to satisfy the request by KPMG Baltics auditing firm, which had been appointed the insolvency administrator of Latvijas Krajbanka, to start the bankruptcy procedure against the bank. Latvijas Krajbanka's banking license was annulled on May 10, 2012.

A useful chronology of the Krajbanka affair can be read at the FKTK website.

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