Investor quality standards questioned

  • 2011-12-15
  • From wire reports

RIGA - Latvian Finance Minister Andris Vilks (Unity) does not believe that Latvijas Krajbanka co-owner Vladimir Antonov was intent on “ruining his banking business and becoming a potential prisoner,” reports LETA. In an interview with daily Diena, Vilks says he doubts that Antonov was taking steps to purposefully derail Krajbanka.
“I believe it rather was his megalomania, or maybe he wished to have a finger in every pie. We do not have sufficient information, though, as replies to many of our questions still have not been received from Lithuania.”
The minister believes that Krajbanka’s days are over, because “I can hardly imagine how reputation could be improved for a bank that became victim to fraud, and I cannot imagine how anyone would like to become the bank’s customer now.”

Replying to Diena journalists question whether there are mechanisms in Latvia for the assessment of the quality of investors, Vilks says that investors from Scandinavia, Germany and Asian countries have preference in Latvia, but Russia is not on this list. “We could try to introduce some additional requirements, but they could be contested. Major companies with large market shares and good reputations are hard to assess,” says the minister.
As for the possibility that Antonov could contest the buyout of airBaltic shares from Krajbanka, Vilks said that the final decision would be up to the courts, but there were many arguments not in the airBaltic private shareholders’ favor. “The airline was operating with losses for a long period of time; the private shareholder and [former airBaltic President Bertolt] Flick tried to mislead the public and the government about the actual situation in the airline.”

Another investor is now being sought for airBaltic, and it has to have a good reputation, a sound financial situation and sustainable long-term plans, says Vilks, adding that bids from offshore companies will be turned down.
The Financial and Capital Market Commission deputy chairman Janis Brazovskis met with Russian banker Alexander Antonov, father of the former Latvijas Krajbanka owner Vladimir Antonov, to discuss options for “reorganizing” Krajbanka.
In another interview with the daily Diena, on Dec. 13, Alexander Antonov says that he, as a banker, believes that reorganizing Krajbanka is “the right way to solving the bank’s problems.”

“I discussed this idea at a meeting with Brazovskis, and he did not seem allergic to it. If the state agrees to this, we will swiftly draw up a Krajbanka reorganization plan, because the bank’s management, in my opinion, was the best in Latvia,” says Antonov.
If the bank reorganization is successful, part, not all, of Russian companies’ money in Krajbanka could be recovered, he says.

The bank’s liabilities to legal entities, which are quite large, may be structured - that is, this money could be recovered according to a schedule. At the moment, Krajbanka has significant properties, because the bank used to foreclose properties of borrowers in case there was even the slightest risk of default - as a result, Krajbanka has major property assets in Russia alone. These properties can be sold for cash, explains Antonov.

His son, Vladimir Antonov, arrested in November, is currently out on bail in the UK awaiting an extradition hearing to return him to Lithuania where he is accused of embezzlement of hundreds of millions of euros from the now bankrupt Snoras Bank. Snoras was majority-owned by Vladimir Antonov, together with partner Raimondas Baranauskas, also out on bail awaiting an extradition hearing.

A source close to one of Antonov’s banks hints that Antonov may plead in the London court that his life is in danger if he is returned to Vilnius in handcuffs, reports Business Insider. “The burn has never come so close to his skin. He is scared to death to come back to Eastern Europe, and most of all to Russia, because he owes plenty of money to dozens of people, some of whom may be tough guys. That’s not to speak about the vanished savings of ordinary Lithuanians, but of the balances on the accounts [at Snoras and Latvijas Krajbanka] of [Russian] offshore companies.” Naturally, the probability of returning cash to claimants is greater if Antonov stays out of the cemetery, but the obligation to return it may be zero if he remains in residence at Ladbroke Square [London].

It remains unclear as to why Antonov and Baranauskas were released on bail by the UK court. As the Lithuanian extradition request is likely to be granted by the court, once Antonov realizes that, he’s a flight risk, especially towards the Caribbean and Panama, where he owns at least two banks (Banco Transatlantico of Panama, Griffon Bank of Dominica) and other assets in the Antilles and elsewhere.
The forensic auditors are reported to have found that Snoras’ books are short by $1.4 billion. Investigation of cash and asset-looting by Antonov from other banks he has controlled include at least 200 million euros that are reportedly missing at Latvijas Krajbanka.

From Nov. 29 to Dec. 12, 58,869 clients of Latvijas Krajbanka have withdrawn a total of 228.3 million lats (325.7 million euros) from the Deposit Guarantee Fund at Citadele Bank branches throughout the country. Krajbanka clients have withdrawn approximately 65.2 percent of the previously allotted 350 million lats for the state-guaranteed compensation payments. So far, compensation has been paid out to 24.7 percent of 238,000 eligible Krajbanka clients.