JSC Latvijas Krājbanka: Chronology of Events from 15.11.2011

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JSC Latvijas Krājbanka: Chronology of Events from 15.11.2011

Date

Event

15.11.2011

Information on the search planned to conduct in a Lithuanian bank is released on the Internet website at http://www.baltic-course.com/eng/finances/?doc=48730 for the purpose of fraud detection, as well as detaining the bank’s heads and taking control over the bank by the Lithuanian government (the name of the bank is not disclosed). Citing information from reliable sources, the daily Lietuvos Rytas informs that the Prosecutor General’s Office has already authorized the search. According to information published by the daily Lietuvos Rytas the above operation is aimed at expelling the Lithuanian banks from the country.

 

15.11.2011

FCMC requests the Bank of Lithuania to give an account of the publication and asks information if there would also be relation to any of Latvian banks regulated by the joint Supervisory College of the FCMC and the Bank of Lithuania.

16.11.2011

Bank of Lithuania responds to the FCMC that it does not possess officially verified information about the daily Lietuvos Rytas publication. Moreover, a reply to the rumours spread in the press is enclosed pointing out that the Bank of Lithuania holds control over the situation in the financial system in compliance with the credit institution regulating requirements. Based on the independent information on the credit institution supervision at its disposal, the Bank of Lithuania recommends that making irresponsible statements regarding the soundness of bank should be avoided, as it can negatively affect public confidence in the financial sector. 

16.11.2011

Early in day the FCMC receives a telephone call from a representative of the Bank of Lithuania, notifying that the central bank has requested the Lithuanian government to take control of AB Bankas SNORAS as it was discovered that assets in amount of about 204 million lats on the bank’s balance sheet were missing.

 

16.11.2011

FCMC immediately sends a letter to the Bank of Lithuania regarding information received by phone on the nationalization of AB Bankas SNORAS and requests more details about the further steps of the Bank of Lithuania and their likely impact on the operation of JSC Latvijas Krājbanka.

 

16.11.2011

As a matter of urgency, the Board of JSC Latvijas Krājbanka is summoned to the FCMC and the JSC Latvijas Krājbanka Board Members Ivars Priedītis, Mārtiņš Zalāns and Dzintars Pelcbergs are requested to sign confirmation that the Bank resolves that:

– without authorization of the FCMC it would not execute any debit transactions in any currency, including through online banking, ATMs and by cash with all Bank-related persons, with all persons related with the shareholders of the Bank and with clients who are not residents of Latvia;

– without authorization of the FCMC it would not execute any debit transactions that exceed 10 000 lats, other than economic activity, in any currency, including through online banking, ATMs and by cash with entities that are mentioned in above paragraph.

 

16.11.2011

FCMC receives an official notification of the Bank of Lithuania that in accordance with Article 4 of the European Parliament and Council Directive 2001/24/EK of 4 April 2001 on the reorganisation and winding-up of credit institutions the Bank of Lithuania has decided to adopt reorganisation measures in respect of AB Bankas SNORAS, operation of the bank is suspended and a temporary administrator is appointed. According to the Bank of Lithuania, the Lithuanian government has nationalized AB Bankas SNORAS shares.

17.11.2011

FCMC representatives pay a visit to Lithuania to meet executives of the Bank of Lithuania and representatives of AB Bankas SNORAS administrator to discuss the situation in AB Bankas SNORAS.

 

17.11.2011

Latvijas Krājbanka Board members Ivars Priedītis, Mārtiņš Zalāns and Dzintars Pelcbergs are summoned to the FCMC Board meeting. The Bank is asked to immediately transfer the correspondent account balance to the European Union banks.

 

17.11.2011

FCMC holds a meeting with representatives of AB Bankas SNORAS administrator, and is notified of the decision of the Bank of Lithuania that operation of AB Bankas SNORAS is suspended until Monday, 21.11.2011, in order to consider prospects of partially resuming its operation as from 21.11.2011.

17.11.2011

An extraordinary meeting of the FCMC Board is held where the JSC Latvijas Krājbanka Board member Zalāns participates, to discuss the information regarding the deposits. A decision is taken according to which restrictions on the settlement of liabilities are imposed on the JSC Latvijas Krājbanka as well as a group of FCMC authorized persons is set up.

18.11.2011

Taking into account that the JSC Latvijas Krājbanka has failed to fulfil the FCMC request regarding the transfer of correspondent account balance, the FCMC authorized representative repeatedly requests the Board of JSC Latvijas Krājbanka to immediately carry out transfer of account balance from the JSC Latvijas Krājbanka to the other EU or US correspondent bank accounts. 

FCMC officials and JSC Latvijas Krājbanka Board members have a video conference with the former shareholder of AB Bankas SNORAS Vladimir Antonov and head of AB Bankas SNORAS Latvian branch Andrejs Surmačs.

FCMC finds out that the transfer requests cannot be performed because the account balance has been encumbered (pledged as security) in five correspondent banks (in Austria, Russia and Luxembourg).

 

21.11.2011

Documentation prepared by the FCMC is submitted to the Prosecutor General’s Office (including refusals received from correspondent banks, minutes of the 18.11.2011 video conference). The FCMC holds a meeting with the representative of AB Bankas SNORAS administrator and JSC Latvijas Krājbanka Board members Pelcbergs and Zalāns. The representative of administrator informs that AB Bankas SNORAS has not resumed its operation this day.

An extraordinary meeting of the FCMC Board is held where JSC Latvijas Krājbanka Board members Pelcbergs and Zalāns take part. Pelcbergs provides more detailed information about depositors and applications for termination of time deposits. Zalāns notifies that the JSC Latvijas Krājbanka President Ivars Priedītis is ready to report losses of the Bank to the Prosecutor General’s Office.

21.11.2011

During an extraordinary meeting, the FCMC Board decides to suspend all of the financial services provided by the JSC Latvijas Krājbanka, as well as suspend the Bank’s Board and Council members from their duties and appoint additional authorized persons by the FCMC to manage the Bank.

22.11.2011

The FCMC Board takes a decision on the occurrence of unavailability of deposits in the JSC Latvijas Krājbanka and regarding the payment of part of guaranteed compensations to the JSC Latvijas Krājbanka depositors.

22.11.2011

FCMC sends a letter to the Bank of Lithuania notifying it of the losses in the JSC Latvijas Krājbanka and requesting to increase, without delay, the JSC Latvijas Krājbanka capital by at least 100 million lats. FCMC requests to be informed about the possibilities to increase capital no later than until 25.11.2011. 

24.11.2011

FCMC Board makes a decision on the bank that will ensure the pay-out of the state-guaranteed reimbursement to the depositors of the Latvijas Krājbanka.

24.11.2011

An agreement is entered into with the JSC Citadele banka on the pay-out of guaranteed reimbursement.

26.11.2011

FCMC considers and meets with the nominees for insolvency administrator within the procedure of insolvency of the JSC Latvijas Krājbanka selected by the Latvian Association of Certified Administrators of Insolvency. Compliance with the Credit Institution Law requirements, impeccable reputation and sufficient experience in credit institutions’ insolvency processes are viewed as the key criteria for candidates.

29.11.2011

Compensation payments to the JSC Latvijas Krājbanka clients are commenced.

01.12.2011

FCMC submits an insolvency petition on the JSC Latvijas Krājbanka to the Riga Regional Court and asks the court to appoint Aigars Lūsis as insolvency administrator of the JSC Latvijas Krājbanka process.

02.12.2011

Riga Regional Court leaves the FCMC insolvency petition on the JSC Latvijas Krājbanka without guidance until 27.12.2011. The decision is made for the purposes to eliminate inaccuracies in the insolvency petition and to submit to the court all the necessary translations of documentation in Latvian.

06.12.2011

FCMC withdraws the candidacy of Lūsis as insolvency administrator of the JSC Latvijas Krājbanka process, because of additional information received from the law enforcement institutions.

09.12.2011

After consultation (inter alia with the law enforcement institutions) a decision is made to put forward Ints Goldmanis as a potential nominee for the insolvency administrator of the JSC Latvijas Krājbanka who would carry out his duties along with the auditing firm Deloitte Latvia SIA, which has gained sound experience in dealing with insolvency processes resulting in solvability of a credit institution (namely, JSC Rīgas Komercbanka and Paritāte insolvency processes).

12.12.2011

FCMC submits request to the Riga Regional Court for assigning Goldmanis as the insolvency administrator of the JSC Latvijas Krājbanka process. Also, inaccuracies in the insolvency petition are eliminated and translation of documentation is submitted to the court.

13.12.2011

Riga Regional Court launches insolvency proceedings against the JSC Latvijas Krājbanka following a petition submitted by the FCMC. Riga Regional Court turns down the nomination of Goldmanis for the Bank’s administrator proposed by FCMC and asks the FCMC to nominate another candidate for the administrator.

15.12.2011

After assessing the actual situation, the FCMC selects the auditing company KPMG Baltics as a suitable candidate for the Bank’s insolvency administrator and submits to the Riga Regional Court its proposal to appoint KPMG Baltics as insolvency administrator of the JSC Latvijas Krājbanka. KPMG Baltics in writing authorizes a sworn advocate, certified insolvency administrator Jānis Ozoliņš to carry out duties of the Bank’s administrator.

16.12.2011

Riga Regional Court appoints the auditing company KPMG Baltics and its proxy Ozoliņš as insolvency administrator of the JSC Latvijas Krājbanka.

23.12.2011

Riga Regional Court declares the JSC Latvijas Krājbanka insolvent. After declaring the Bank’s insolvency, KPMG Baltics is obliged within a month to assess the credit institution’s financial standing, decide on the insolvency solution (recovery, bankruptcy) and submit it to the FCMC.

 

 

 

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