The Bank of Latvia filed a court claim Feb. 8 that expressed no confidence in Barrey and called for his removal. The central bank justified its move by pointing to unsatisfactory audit results of the to-be-liquidated bank. It also called Barrey "incompetent."
The liquidator, however, tried to make it clear that he stepped down first, and submitted a claim to the Riga court Feb. 22 asking it to approve his Feb. 5 resignation.
"Judging from the activities and expressed attitude of the Bank of Latvia, there is no reason to hope for the Bank of Latvia's support for the liquidation process, and resignation is the only alternative," reads Barrey's statement, which was distributed Feb. 22.
But his words went unheard in the court room when the court ruled to dismiss the liquidator, thus satisfying the central bank's claim.
Various Latvian politicians supported Barrey's dismissal. Some said it should have come earlier.
The Bank of Latvia asked the prosecutor general's office to investigate whether Barrey's actions constituted criminal liability, and it has also launched an in-depth audit of the failed bank.
When the central bank audited Banka Baltija last December, it found numerous violations in the bookkeeping.
Janis Placis, deputy head of the central bank's Credit Institutions Supervision Department, told the Baltic News Service the bank does not have a full picture of changes in Banka Baltija's assets after Barrey took up the liquidation.
Barrey, who represents the international accounting firm Deloitte & Touche, took over the liquidation of the Banka Baltija from lawyer Ugis Grube in 1996.
The central bank said it did not find a balance sheet of Banka Baltija's assets when Grube passed over the liquidation to Barrey during the audit. It also accused Barrey of not preparing a 1998 balance sheet that would allow the bank to examine the failed bank's revenues and expenditures.
Deloitte & Touche has drawn 1.6 million lats ($2.76 million) for its services out of the 14.7 million lats recovered, and the central bank claims some of the payments drawn by the accounting firm are not supported by any documents.
At the beginning of the conflict rumors surfaced that some of the recovered money was lost in deposits in Rietumu Banka, but Barrey denied these accusations.
"No funds were lost in any banks," he said, noting that the recovered funds have been transferred to the central bank of Latvia.
The central bank announced Feb. 26 that there are 10.4 million lats and $1.7 million on the failed bank's accounts, but it notes that the liquidator failed to transfer 84,000 British pounds from Allied Irish Bank despite numerous reminders.
The court approved a Latvian audit company Invest-Riga as the new liquidator Feb. 23. The Latvian company will have to carry out Barrey's promise and start paying off compensations to depositors on March 29.
Invest-Riga's spokesperson Aldis Vaivars said the company would take up the liquidation sometime in mid-March after Barrey submits a final report to the central bank. He could not predict whether Banka Baltija's depositors will get their money on time.