MEPs call for probe into Montenegro's First Bank over money laundering allegations

By bne IntelliNews January 24, 2016

Members of the European Parliament have called for pressure to be put on the Montenegrin authorities to start an investigation into First Bank (Prva Banka) over allegations the bank has been involved in money laundering.

First Bank is controlled by prime minister Milo Djukanovic’s brother, Aco Djukanovic, and local NGOs have dubbed the bank the “personal ATM” of Djukanovic’s family and close allies. As Montenegro aims for EU membership, the country’s leadership is coming under increased pressure to investigate high-level corruption.

The proposal to call for an investigation into First Bank was among 155 proposed amendments to the draft motion for a resolution on the European Commission’s 2015 Report on Montenegro.

The amendment proposed by MEPs Ulrike Lunacek and Terry Reintke, “calls for starting investigations and prosecutions of related high level cases including alleged money laundering cases involving the Prva Banka.”

The also express concern “about delays and blockades regarding ongoing investigations such as in the Telekom and KAP [Kombinat Aluminijuma Podgorica] cases.” The Montenegrin authorities launched a probe into the 2005 sale of state-owned telecoms incumbent Telekom to Magyar Telekom in 2012.

Another amendment tabled by the two MEPs recommends “proper follow-up” by the government to recommendations adopted by the parliament, and singles out the lack of action on an independent audit into spending by Montenegro’s largest industrial company KAP.

According to the Organised Crime and Corruption Reporting Project (OCCRP), First Bank was privatised back in 2006, when a 30% stake was sold to Aco Djukanovic’s firm Monte Nova, which already had another 12% in the bank. Over the next two years, via a series of capital hikes, Djukanovic took over the control of the bank.

An audit by PricewaterhouseCoopers, carried out in 2010, claims that the bank allegedly breached money laundering regulations as it failed to report shady transactions, OCCRP reported. The BBC quotes the same audit as saying that two companies connected to convicted money launderer Dusko Saric, brother of convicted cocaine smuggler Darko Saric, had accounts with First Bank and were among its biggest customers.

First Bank faced liquidity problems in 2007 and was bailed out by the government in 2008.

According to the latest available data from Montenegro’s central bank, First Bank’s assets totalled €310.3mn at the end of September 2015, up from €286.9mn a year earlier. Its net profit sank some 52% y/y to €0.15mn in the first nine months of last year.

Related Articles

Moody’s places Slovenia’s largest bank NLB on review for downgrade

Moody’s Investor Service announced that it has placed on review for downgrade the ratings of Slovenia’s largest lender Nova ... more

Multilateral lender IIB to place its inaugural transaction in Czech koruna

Moscow-based development bank International Investment Bank (IIB) has priced its denominated private placement transaction with three-year floating rate notes in koruna of CZK501mn, the bank said in ... more

Moldova to take over major stakes in country’s largest banks

Moldova’s government has instructed its Public Ownership Agency (APP) to take over major stakes in the country’s largest banks, Moldova-Agroindbank and Moldindconbank, that were previously ... more

Dismiss