Iulian Ernst -
The showdown between the European Bank for Reconstruction and Development (EBRD) and alleged "raiders" at Victoriabank, Moldova’s third largest bank, will take place on October 23 at an extraordinary shareholders' meeting to appoint a new managing board.
The case has become a key test for the Moldovan government, which is facing massive public anger over a series of bank frauds in which local oligarchs connected to Russian business interests allegedly siphoned money out of the country, leaving the state to pick up the bill.
The meeting was summoned at the request of the EBRD (which has a 15.06% stake), which wants to restore corporate governance at Victoriabank, where shareholders lost control over the management last autumn. EBRD’s call, issued on August 8, must have been endorsed by other shareholders, since under Moldovan legislation only investors representing 25% of shares can call such a meeting.
The agenda proposed by EBRD for the shareholders’ meeting includes the early termination of the powers of the current supervisory board of Victoriabank, which has been suspended by court order since September 2014, as well as the election of a new board.
The new board will be in a position to enforce early termination of the contract of the managing board, which has been in conflict with the supervisory board (and shareholders) since spring 2014. The management board obtained in court the renewal of its contract last September, despite the opposition of shareholders.
Last September, Victoriabank was “raided” – the term used in the former USSR for a fully or partly illegal attempt to take over a company – by groups planning to take control of the bank, the head of the supervisory board Vlad Turcanu warned in September 2014, pointing to overnight court decisions that blocked shareholder control.
Hijacking Moldova’s weak and corrupt legal system is a common tactic of raiders. In this case, the Buiucani Court invalidated, at the request of a minority shareholder, the supervisory board’s decision to dismiss the managing board and an investigation into its activities, and invalidated some of the board’s decisions. The Buiucani Court also suspended the supervisory board and renewed the contract of the managing board, thus leaving shareholders with no formal control over the bank.
Victoriabank is only one of several banks that have been the target of alleged frauds. Last year, in what some in Moldova are dubbing the crime of the century, around $1bn was taken out of Banca de Economii, Banca Sociala and Unibank. Popular anger over the fraud has led to massive demonstrations calling for the resignation of the government and president.
The EBRD, which has won central bank permission to try to take full control of Victoriabank, has criticised the Moldovan authorities for obstructing its takeover. An anonymous letter from Victoriabank's shareholders has accused Vladimir Plahotniuc, the vice-president and most influential figure in the governing Democrat Party, of being involved in the raiders' plot. Companies allegedly connected to Plahotnuic reportedly used to be shareholders in the bank.
EBRD owns 15.06% of Victoriabank and Alpha Bank Romania holds 12.5%. The family of the bank’s founder, Victor Turcanu, including his former wife Valentina Turcanu, Valentina’s sister Galina Proidisvet, and Galina’s daughter Artemenco Elena, control some 25%.
The bank’s largest shareholder is Insidown LTD, registered in Cyprus, with 39.2%. The final beneficiary of the stake is declared to be a German dentist, Dr Peter Fischer, operating in Bucharest and Berlin. Media generally doubt that Fischer would be the final beneficiary of the 39.2% stake, questioning his financial resources for the deal.
Mold-street.md quotes public registrars in Cyprus as disclosing that the owners of Insidown Ltd are Belserve Consultants Limited and Vaspaco Properties Limited, both related to major Russian companies allegedly linked to an earlier huge Greek money laundering scandal.
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