Moldova’s central bank has blocked the voting and other rights of shareholders holding nearly 40% of the shares at country’s largest bank Moldova Agroindbank, the monetary authority announced on March 2.

The central bank’s decision is the first significant step toward making the ownership of Moldova’s banks more transparent, one of the key recommendations from IMF experts during their visit to Chisinau in February.

The shareholders at Agroindbank have been operating as a coordinated group, the central bank said in a statement.

The central bank accused the group of purchasing stakes in Agroindbank without prior approval. Purchasing stakes below the 5% threshold requires permission from the central bank if buyer is part of a group holding other stakes that, added to the new shares, would push the group’s participation above the threshold.

The group includes the seven largest institutional shareholders in Agroindbank, registered in the UK, Russia and Cyprus, as well as Moldova’s second largest bank, Moldinconbank.

There are rumours that the group is coordinated by Veaceslav Platon, the author of several large-scale raider attacks in the former Soviet space in the past decade. Platon is suspected to have taken control over Agroindbank in 2013 through firms registered in UK, Cyprus and the Baltic states.

Central bank governor Dorin Dragutanu said in 2014 that the same people were behind raider attacks at Agroindbank and another Moldovan bank, Victoriabank, and he linked the name of Platon to the group of firms. Platon has attended shareholders’ meetings at Victoriabank as a representative of Volmark – a shareholder of Victoriabank, but also part of the group that took over the 30% stake in Agroindbank.

Agroindbank’s largest shareholder is the bank’s former president Natalia Vrabie (4.99%), who together with her family owns some 7.5%. Vrabie was dismissed in 2013 and replaced with Serghei Cebotarii, who currently heads the bank, after a group of new shareholders - including most of those named in the central bank’s release as part of the coordinated group - questioned her management. The Vrabie family was not mentioned as part of the group.

Another important shareholder at Agroindbank is Societatea Civila a Actionarilor, an association of smaller shareholders with uncertain legal identity that controls some 32% of the bank.

The shareholders mentioned as part of a coordinated group will have to sell their shares within three months, and Agroindbank will summon a general shareholders meeting for the appointment of a new managing board, the central bank said.

The central bank’s statement also says that it has withdrawn the confirmation of two vice-presidents of Moldinconbank’s management board. No reasons are given for the move, but the decision was announced at the same time as the steps taken at Agroindbank, indicating the two might be related.
 
Moldova’s banking system is plagued by lack of transparency regarding ownership. Helped by the corrupt judicial system, raider attacks have frequently been carried out in recent decades, typically with the final aim of using Moldovan banks to launder money from Russia. During such attacks, fake documents have been used to deprive legitimate owners of their shares  with the help of corrupt judges in Moldova and Ukraine.

While the functioning of the local banks is not directly at risk as a result of such practices, since the new owners need them to operate in the most possibly normal way, more recently the siphoning of some $1bn from banks caused the situation to significantly worsen. Three large banks, holding 30% of the sector’s assets, were liquidated in 2015, and their losses, amounting to some 10% of country’s GDP, will going to be transferred to the public debt.

As the country’s largest bank, Agroindbank was the target of raider attacks, most recently in 2013 when firms allegedly controlled by Platon acquired a 30% stake from three Slovenian firms with a combined shareholding of 14.03% and several other small shareholders. The stake was acquired through five UK registered firms - Altell Impex Ltd, Nutzen Limited, Ostryn Business Limited, Volmark Trade Ltd and Sempai Trading Ltd, plus Riga-based SIA Dilnoro Group and Cyprus registered Diarstamia Management LIM.

The central bank concluded in 2013 that the sale of shares by the Slovenian owners to the group of firms was legal, but it concluded following investigations carried out immediately after the deal that five of the seven companies involved in the alleged raider attack were operating in a coordinated way, and compelled them to sell the shares.

However, the buyers of the shares were also part of the coordinated group identified in 2016 by the central bank. They comprised Symbol Wood Limited which bought 4.41% of the bank, Azyol Development Ltd (2.88%), ООО Evrobalt (3.75%), Ostryn Business Limited (3.8%), Hessond Solution Limited (4.49%), Dresfond Invest Limited (4.48%), Multigold Production Limited (2.27%).