TALLINN - Majority ownership of Estonia’s fifth-largest bank, Krediidipank, has, bit by bit, recently moved into the control of shady offshore-companies, reports Aripaev. From December to March, 54 percent of Krediidipank’s shares were bought by six companies registered in Cyprus and 1 registered in the British Virgin Islands. The persons officially cited as their owners have no connection to Estonian banking and, therefore, the real owners are apparently hiding.
The transactions have been investigated since the start of the year, not just by Russian authorities, but also the Estonian Financial Authority (EFA), but so far they have come up with nothing. EFA head Raul Malmstein said that their aim is to find out who are the beneficiaries behind the acquisition of major stakes (considered from 10 percent), and what means they have used to acquire the stakes in Krediidipank.
A special permit has to be applied for to acquire a major stake in such entity.
“If we don’t get adequate explanations to our questions, we have the right to suspend the voting rights of the shareholders since the ownership circle of every bank operating in Estonia and the European Union has to be transparent and financing clear,” said Malmstein.
The whole saga started in May last year when Bank of Moscow, the then owners of nearly 90 percent of Krediidipank shares, announced their wish to reduce their stake. When talks with a London fund broke off, the fast sale of shares followed: eight transactions in four months, two of them with Estonian managers of Krediidipank and six with unknown offshore companies.
Krediidipank’s managing director, Andrus Kluge, had announced that neither he, nor financial authorities, have information regarding the bank’s ownership. According to Kluge, the problem is not hiding in Estonia, but in the Bank of Moscow that owns a holding in Krediidipank and is itself in a takeover battle.
The Bank of Moscow, though, has turned to the Interior Ministry to investigate the sale of part of its 43.79 percent stake in Krediidipank, as well as the legality of the deal, reported BBN. Bank of Moscow sold 10.748 million shares in Krediidipank for 6.9 million euros, having cut its stake in the lender to 16.22 percent.
“The Bank of Moscow employees responsible for preparing such deals were not informed about the sale of a part of Bank of Moscow’s stake in Kredidipank,” the bank said in a statement.
Krediidipank refuted the accusations, rejecting accusations from the Bank of Moscow that the sale of 27 percent of its shares was sealed through an unlawful contract.
The parties state that the deal was made by the former president of the Bank of Moscow, Andrey Borodin, shortly before he was fired. The bank’s leadership said Borodin had neglected the duty to inform others of the sale. Borodin told RIA Novosti that the accusation was “groundless.”
The former bank president is currently residing in London, according to RIA Novosti, and Russian prosecutors have requested a warrant for his arrest.
Representatives of Krediidipank said the deal was made on March 24, roughly a month before Borodin was let go.