Lithuania accuses former regulator of collusion in Snoras collapse

By bne IntelliNews December 18, 2012

bne -

The Lithuanian General Prosecutor's Office officially announced on December 14 that it suspects a former senior supervision official at the Bank of Lithuania of helping to cover up the violations at the collapsed Bankas Snoras.

An investigation into the collapse of Snoras, which had to be taken over by the state in November 2011 after a huge hole was found on its balance sheet, produced evidence to suspect Kazimieras Ramonas - head of the Credit Institutions Supervision Department at the time - of covering up deficiencies and legal violations starting in 2009, the office said on its website. Ramonas has pledged not to leave Lithuania, according to local media.

Ramonas' actions and deliberate failures to act "allowed Snoras to hide from the Bank of Lithuania the true ownership of assets it held in foreign banks," the Prosecutor's Office said, according to Bloomberg. "That is why the threat of Snoras being insolvent was not recognized in time." The announcement came just two days after Lithuania's Special Investigation Service launched a pre-trial investigation of Ramonas' actions and his possible failure to perform his duties.

Ramonas, who previously said he neither knew about the problems at Snoras nor had reason to suspect them, was fired the same month that the bank - formerly owned by Russian banker Vladimir Antonov and local partner Raimondas Baranauskas, who are in the UK fighting extradition to Lithuania - was seized with missing assets to the tune of over €1bn. The Latvian subsidiary Krajbanka was declared bankrupt just after Snoras on December 1, 2011.

As bne reported at the time of the collapse, Antonov's background - which includes strong connections to a particularly cut-throat section of the Russian banking sector - should likely have caused the Baltic banking authorities to move far quicker. Indeed, the Bank of Lithuania's concerns over the state of Snoras' balance sheet were made public at the start of 2011.

Two of Ramonas' deputies quit their jobs at the central bank regulator shortly after he was fired. It has also emerged that Ramonas daughter and sister both worked at Snoras, and that he participated in the wedding of Baranauskas' son Edgaras. An appeal from Ramonas against unlawful dismissal was rejected by a Vilnius court in June 20.

Lithuania was forced to issue unplanned Eurobonds of €1bn to help it pay out Snoras depositors under a state guarantee scheme, and Vilnius is now hunting down Antonov's assets across the global in order to receive compensation.

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