Court document trail leads to Moldovan politician's bank ownership

By bne IntelliNews July 24, 2012

Graham Stack in Kyiv -

Documents produced during a lawsuit at the High Court in London point to a conflict of interest for top Moldovan politician Vladimir Plahotniuc.

The documents produced during the court case show that Moldova's first deputy speaker of parliament held a 26.75% stake in Victoriabank, one of the country's largest. Plahotniuc was chairman of the board of Victoriabank until running for parliament in elections in November 2011, but he has never acknowledged owning a stake in the bank.

This raises the issue of a conflict of interest, since Moldova's Democratic Party, for which Plahotniuc holds the post of first deputy speaker of parliament and of which he is regarded as the main financial backer, runs the financial bloc within the ruling Alliance for European Integration coalition.

Muddy waters

The documents were obtained as part of a court case brought before the High Court by rival businessmen, Viorel and Victor Tsopa. They appear to show that Plahotniuc was the beneficiary owner of Cyprus company FinPar Victoria Ltd., which in turn owns Dutch company OTIV Prime Holding, 100% owner of OTIV Prime Financial. OTIV Prime Financial in turn owns 26.75% of Victoriabank.

Muddying the waters, however, is that after the London court case started, OTIV Prime Financial changed its name to Generashon Financial, and is now believed to be owned by a little known businessman, Iuri Kontievski.

The European Bank of Reconstruction and Development (EBRD) holds a 15.06% stake in Victoriabank. Asked whether they knew who their co-owners are, and whether Plahotniuc is among them, EBRD declined to comment.

Plahotniuc is accused not only of being the secret owner of a stake in Victoriabank, but of having "stolen" stakes in Victoriabank and other banks and companies in 2011 through corporate raiding via crooked local court decisions. Not only rival businessmen such as the Tsopa brothers Victor and Viorel, but the prime minister and formally Plahotniuc's coalition partner, Vlad Filat, have all sounded the alarm over the raids. In August 2011, Filat announced that not only Victoriabank, but also three other large banks - Moldova-Agroindbank, Universalbank, Banca de Economii - and an insurance company had all been subject to raider attacks, whereby shareholdings were transferred by dubious court orders to offshore entities with unknown beneficiaries. The decision regarding Moldova-Agroindbank was later reversed by Moldova's supreme court of justice.

Plahotniuc has refuted the accusations, attributing it all to mudslinging from opponents. It was Plahotniuc and his protege Marion Lupu's change of sides after disputed elections in April 2009 that caused the former communist regime under Vladimir Voronin to fall to the liberal parties of the Alliance for European Integration. Plahotniuc, however, had made his shadowy fortune under Voronin, and so now has plenty of enemies on both sides. "These accusations are inevitably very politicized," Cornel Ciurea, an analyst at the Viitorul think-tank, tells bne.

The case in the High Court is ongoing and will doubtless see further revelations in the coming months. A parliamentary commission in Moldova is also investigating the claims of corporate raiding.

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