Head of Poland’s financial regulator KNF resigns after billionaire banker's accusations of soliciting bribe

Head of Poland’s financial regulator KNF resigns after billionaire banker's accusations of soliciting bribe
The head of Poland's financial market regulator KNF Marek Chrzanowski resigned after the accusations surfaced in the media.
By Wojciech Kosc in Warsaw November 13, 2018

The head of Poland's financial market regulator KNF Marek Chrzanowski resigned on November 13 following media revelations that billionaire banker Leszek Czarnecki had accused the official of soliciting a bribe in return for the KNF’s favourable approach to Czarnecki’s banking businesses.

The accusations were made public earlier on the day in articles run by Polish newspaper Gazeta Wyborcza and the Financial Times.

Poland’s Prime Minister Mateusz Morawiecki has demanded a probe into the allegations, which surfaced after Czarnecki submitted information on the alleged bribery attempt to the prosecutor’s office.

According to the information, Chrzanowski invited Czarnecki to a private meeting at the KNF in March. During the meeting – which Czarnecki secretly taped – Chrzanowski offered a number of favours from the KNF in return for Czarnecki hiring a lawyer indicated by Chrzanowski at Getin Noble Bank, which the billionaire controls.

The KNF head told Czarnecki he would work to have Zdzislaw Sokal removed from the KNF because of the view that Czarnecki’s banks, Getin Noble Bank and Idea Bank, should be nationalised. 

Sokal sits on the KNF as a representative of President Andrzej Duda. He is also is the head of the deposit guarantee fund BFG.

Chrzanowski also told the billionaire the KNF would adopt a favourable approach to Czarnecki’s banks when it comes to new stricter capital requirements and the banks’ restructuring process.

Czarnecki told the prosecution that Chrzanowski demanded he hired a lawyer that the KNF head suggested should be put on a contract worth “1% of Getin Noble Bank’s value,” or some PLN40mn (€9.3mn).

Chrzanowski indicated the value of the contract on a slip of paper, Czarnecki told the prosecution. There is no direct indication of the specifics of the proposal in the recording.

Chrzanowski initially said he would not resign. The KNF denied the allegations, calling them “blackmail”.

The regulator admitted, however, that Chrzanowski suggested hiring the lawyer in question, Grzegorz Kowalczyk, although solely on the basis of the lawyer’s expertise, without any details regarding his contract.

Morawiecki demanded Chrzanowski met him on November 14, the prime minister's office said following the furore in the media after the publication of the articles by Gazeta Wyborcza and the Financial Times.

Getin Noble Bank and Idea Bank stocks were trailing throughout the day’s trading on the Warsaw Stock Exchange.

Getin Noble Bank posted a consolidated net loss of PLN116.05mn in the second quarter but was confident the negative trend would reverse in the second half of the year, the bank said in late September.

Idea Bank – which Czarnecki is mulling merging with Getin Noble Bank – posted a net loss of PLN404.6mn in the second quarter. The bank is also expecting to improve its results in the following quarters.

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