Moldovan “raider” Platon remanded for 40 days in Ukraine over alleged banking frauds

Moldovan “raider” Platon remanded for 40 days in Ukraine over alleged banking frauds
By bne IntelliNews July 29, 2016

Veaceslav Platon, a reputed corporate raider from Moldova, has been detained for 40 days in Ukraine at the request of prosecutors, the head of Moldovan cross-border cooperation police Fredolin Lecari confirmed on July 28. Moldova will launch extradition procedures in the meantime, he added.

Platon’s trial could shed light on the $1bn frauds in Moldova’s banking system. Renato Usatii, another controversial Moldovan businessman turned politician, who started his career in Russia, has claimed that Platon’s arrest was ordered by his rival, oligarch Vlad Plahotniuc, who leads the ruling coalition in Moldova and reportedly exerts certain control over the judiciary system.

Plahotniuc already controls Victoriabank, which was previously controlled by Platon, and he is believed to want the other two banks reportedly controlled by Platon – Moldova Agroindbank (MAIB) and Moldindconbank.

However, Usatii's comments come in the context of the campaign ahead of Moldova's presidential elections scheduled for October 30, where he is backing the pro-Russian Socialist Party's leader Igor Dodon. Among Dodon's rivals will be the candidate of the ruling coalition backed by Plahotnuic.

Moldova’s head anticorruption prosecutor Viorel Morari said on July 27 that Platon and another businessman, Ilan Shor, were the beneficiaries of $175mn scams involving Victoriabank and Banca de Economii a Moldovei (BEM). Platon reportedly coordinated with Shor, who has already been arrested for large-scale fraud and money laundering.

According to Morari, firms controlled by Platon received $40mn and MDL124mn loans (some $140mn in total) from Victoriabank, when he apparently controlled the bank in 2011-2012. The money then sent to offshore firms. In November 2014, loans extended by BEM to Moldovan firms Provolirom and Caritas Grup were used, through offshore firms, to repay the loans initially extended by Victoriabank in 2011-2012. BEM was controlled at that time by Shor.

While the Moldovan authorities want to extradite Platon, they have admitted that his Ukrainian citizenship might complicate the procedures. Platon claims he rennounced his Moldovan citizenship but the authorities in Chisinau have not confirmed this.

The Russian authorities might also ask for the extradition of Platon, for his involvement in the laundering of money siphoned off from the Russian Federation's government, newsmaker.md informed quoting Russian daily Kommersant. The daily implied Platon could also hold Russian citizenship.

Moldova's central bank is currently trying to remove a coordinated group, reportedly controlled by Platon, from the ownership of MAIB. Moldova’s financial market supervisory body CNPF is expected to cancel the shares of the investors holding nearly 40% of MAIB, and issue new shares to be publicly auctioned. CNPF previously ordered a similar procedure for shareholders of 3.5% of the same bank, but the procedure has not been enforced yet. Overall, some 43% of the country’s largest bank would be for sale, if the authorities go forward with the procedure for the 40% stake.

On March 2, Moldova’s central bank blocked the voting and other rights of the shareholders holding nearly 40% of MAIB shares. The shareholders mentioned as part of the coordinated group were asked to sell their shares within three months, the central bank said. The deadline expired on June 2, but the central bank and CNPF have not announced further steps yet.

Moldonconbank, also believed to be controlled by Platon, was reportedly involved in laundering Russian money. Moldova stopped the laundering of Russian money through Moldindconbank, previously carried out with the support of Moldovan corrupt judges, back in May 2014, the National Anticorruption Centre (CNA) said in May 25 press release. The investigation continues.

The CNA’s statement was in response to statements from the head of the anticorruption and economic security bureau within the Russian interior ministry, Andrei Kurnosenko, that the process was continuing. Kurnosenko estimated, quoted by Tass on May 20, that RUB700bn ($10.5bn) of funds had been siphoned through Moldova. The CNA said Kurnosenko’s statement was “distorted and untrue”.

Victoriabank is controlled by Cyprus-based Insidown, which in turn is controlled by Russian businessman Sergei Lobanov. But the ultimate beneficiary remains unclear, as Usatii says Plahotniuc still controls the bank.

The offices of the head of Russia’s Federal Customs Service (FCS) Andrei Belyaninov, as well as his former adviser, Lobanov were searched as part of an on-going criminal case concerning the smuggling of alcoholic beverages, Newsmaker.md reported on July 26. Belyaninov was dismissed.

Insidown purchased the 39.2% stake in Victoriabank in November 2014, in small blocks of below 5% (the threshold set for central bank control), from firms reportedly controlled by Platon.

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