Regulator orders Moldova Agroindbank to cancel shares after trading rules breached

Regulator orders Moldova Agroindbank to cancel shares after trading rules breached
By bne IntelliNews April 14, 2016

The National Financial Market Commission (CNFP) has issued an order to cancel 3.5% of the shares in Moldova’s largest bank Moldova Agroindbank, and for new shares to be issued and put up for sale.

Back in December, the central bank decided that the owners of 3.53% of the bank’s shares had acted in concert and acquired stakes in the bank without BNM’s approval. The central bank blocked their voting rights and ordered them to sell the shares within three months starting December 23. This deadline has now expired.

According to the decision approved by the CNFP on April 7, after the share cancellation, the bank should issue new shares which will be put on sale on Moldova’s stock exchange for a period of three months. Should the sale fail, the new shares will be cancelled and the bank’s share capital decreased.

The CNFP's April 7 decision stipulates the benchmark price asked by the bank for the shares issued and offered for sale on the stock exchange. This will be the average market price of the shares in the past three years (provided more than 1% of shares were traded during the period), or the weighted average price paid by the former owners of the shares.

The group of shareholders comprises Money@Box Ltd, Nestol Limited, Business Worldwide Alliance Financial Services Ltd and Advanced Asset Protection LTD.

According to Moldova’s central bank, there were a series of transactions with Moldova Agroindbank’s shares in April 2015 which resulted in the four non-resident companies entering its shareholding structure.

UK-based Money@Box Ltd has a holding of 0.95% in Moldova Agroindbank and is owned by Inna Rudko and Serghei Zheltov from Ukraine. Nestol Limited, with a 0.98% share capital, is also registered in the UK. Its owner is Romanian.

UK-registered Business Worldwide Alliance Financial Services with a 0.98% share capital, is owned by Ukraine’s Iryna Ratushna and Oleg Utvenko. Moldovan media has written that the company is also a shareholder in Moldovan insurance company Dextra Asigurari.

Advanced Asset Protection, also UK-based, has a 0.61% holding and is owned by a Ukrainian citizen.

The same procedure might be applied to an additional 39.6% stake in the bank if the current owners fail to find buyers by June. The central bank said last month that it found that the owners of the 39.6% stake had also been operating as a coordinated group and accused them of purchasing stakes in Agroindbank without prior approval.

Initially seen as a step toward the clarification of bank ownership structure in Moldova, the central bank's decision against the owners of this more substantial stake in the bank raises questions. The decision was made on the day the bank’s new governor Sergiu Cioclea was endorsed by lawmakers, but it was signed by outgoing governor Dorin Dragutanu whose term expired 30 days later.

However, there are voices that claim the cancellation of such a large block of shares is equivalent to a raider attack, and warn of a possible new shock to the banking system.

Former deputy and president of the parliamentary Committee on Economy, Budget and Finance, Veaceslav Ionita claimed earlier this week the sale of more than 30% of the shares of a big bank [which roughly equals the blocking majority] was nothing but a raider attack.

“It is required that in three months they should be sold on bourse. We have a dead bourse. I cannot imagine how anyone could sell 30% in Moldova’s largest bank in three months. In Russia, this is called a raider attack,” Ionita said, according to Jurnal TV.

Agroindbank has been the target of raider attacks, most recently in 2013 when firms allegedly controlled by Veaceslav Platon, the author of several large-scale raider attacks in the former Soviet space in the past decade, 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.


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