Latvian financial regulator approves ABLV self-liquidation plan

Latvia's financial regulator, the Financial and Capital Market Commission (FKTK) announced June 12 it had decided to allow ABLV bank to undergo a process of self-liquidation.

The decision came three months after ABLV made an application to do so in the wake of money-laundering allegations by the U.S. financial authorities and a week after FKTK postponed a decision on the matter while hinting that self-liquidation was not the most likely course of action, as previously reported by LSM.

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ABLV voluntary liquidation plan

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"It is the first time in Latvian history" that such a request has been made, FKTK head Peters Putniņš told reporters at a hastily-convened press conference, explaining this as part of the reason for the delay in making a decision, and saying self-liquidation was "the most appropriate way" to proceed.

"This decision has been taken - a positive decision," Putniņš said, adding that strong controls would be in place to ensure monies returned were the right monies to the right depositors.

The European Central Bank (ECB) has been informed about the decision and FKTK has concluded that the bank has sufficient assets to meet all legitimate claims of creditors.

In the coming days a draft decision regarding the cancellation of the license issued to the bank will be submitted to the ECB and then within three days after the cancellation of the license, the bank's liquidators must publish a notice on the liquidation in the Latvian Journal, which in turn will be the start of a three-month application deadline for creditors, FKTK said in a handout.

According to the terms of the plan (see attachment), around 20,000 depositors will get all their money back but 3,768 would see a shortfall between the amount they have on deposit and the amount they will be able to claim back. Of those 3,768, some 3,281 are foreign in origin.

Responding to the announcement, ABLV bank said in a statement its assets currently amounted to 2.4 billion euros and that liquidators Eva Berlaus and Elvijs Vēbers plus real estate expert Andris Kovaļčuks and corporate finance expert Arvīds Kostomārovs would be involved in the liquidation process along with auditing company Ernst & Young.

 

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