Latvian regulator has not yet made decision on ABLV Bank's voluntary liquidation

RIGA - The Finance and Capital Market Commission has not yet made the decision on the application for voluntary liquidation submitted by ABLV Bank in March, the financial regulator's spokeswoman, Ieva Upleja, told LETA.

She said that new documents were submitted to the Finance and Capital Market Commission after May 20 and the regulator had to make the decision within 30 days since receiving the last documents.

Upleja said she would not make any speculations as to when the Finance and Capital Market Commission might make its decision but stressed that it would not be a matter of few days because the case was complicated.

The head of the Finance and Capital Market Commission, Peters Putnins, said on the public Latvian Television that the delay was due to the need to develop control mechanisms for safe liquidation of the bank. Because of the complicated situation, in case of ABLV Bank it will most probably be liquidation proper, not voluntary liquidation, he said.

"This is not going to be a classic voluntary liquidation process," Putnins said.

Upleja explained to LETA that "the whole process" faced by ABLV Bank should rather be called liquidation but voluntary liquidation would be one of the phases in this process.

The most important thing for ABLV Bank right now is to pay all its creditors, and the bank is prepared for tight control requirements during voluntary liquidation, the bank's spokesman, Arturs Eglitis, told LETA when asked to comment on the statements by Putnins.

He said the payments to creditors can be done during voluntary liquidation and the bank had made thorough plans to this end. Moreover, international auditors have confirmed that those plans are realistic.

"What is happening at the bank now is liquidation, and there is no contradiction with what the Finance and Capital Market Commission said. Voluntary liquidation is a form of liquidation. We are ready for tight control as provided for also in the voluntary liquidation plan. We are open to requirements that would speed up the decision-making so that customers could begin submitting their creditor claims," Eglitis said.

As reported, the Latvian financial regulator, the Finance and Capital Market Commission, acting on the instructions from the European Central Bank (ECB), ordered ABLV Bank to stop all payments as of February 19, 2018, following a report by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of Treasury about ABLV Bank's involvement in international money laundering schemes and corruption.

The lawyers of ABLV Bank have urged FinCEN to recall its proposal, saying that the accusations against the bank were exaggerated and FinCEN had not provided evidence supporting the allegations of money laundering and bribery.

On February 26 the shareholders of ABLV Bank made a decision to start the liquidation process for maximum protection of the interests of its clients and creditors.

On May 3 ABLV Bank and its largest shareholders filed a complaint with the EU Court of Justice against the European Central Bank (ECB) and the Single Resolution Board (SRB) about several possible violations, including abuse of power, failure to observe proportionality and equal treatment, etc. The complaint lists a range of serious objections to the manner of how the decision about the bank being failing or likely to fail was taken.