RIGA - The Senate of Latvia’s Supreme Court on July 22 rejected a request by VEF Bank to suspend the Finance and Capital Market Commission’s (FCMC) decision to revoke the bank’s license, reports news agency LETA. This means that the Senate has overturned the Administrative Regional Court’s decision to suspend the FCMC’s May 26 decision to annul the banking license for VEF, the Supreme Court’s spokeswoman Rasma Zvejniece said. The Senate’s decision cannot be appealed.
VEF had earlier requested the court suspend the Financial and Capital Market Commission’s decision.
FCMC spokeswoman Anna Dravniece, speaking on the May 26 decision, had earlier said that “The revoking of the bank’s license is not related to the bank’s insolvency. This decision was made based on the fact that the bank has not received authorization from the FCMC for its new shareholders; therefore the shareholders have no decision-making rights and are unable to ensure prudent bank operations.”
The decision prohibited the bank from executing any transactions and money payments. An FCMC representative was also appointed to monitor the bank’s insolvency process until a bankruptcy administrator could be appointed.
On June 9, at VEF’s request, the Riga Regional Court halted FCMC’s petition to begin liquidation of the bank, calling for a review of the bank’s liquidation and seizure of its property.
The bank reported 751,243 lats (1.0 million euros) in losses last year, approximately 4 percent more than in 2008.
VEF is Latvia’s smallest registered commercial bank, taking only 0.02 percent of Latvia’s total banking market. The bank’s assets on May 25 of this year reached 4.9 million lats. The bank’s loan portfolio fell from 2.2 million lats to 1.6 million lats, whereas the amount of deposits at the bank dropped from 2.8 million lats to 1.2 million lats.
VEF’s biggest shareholder is the Hong Kong company Uniwell Worldwide, Limited.