Bank of Moscow Comments on Situation Regarding AS Eesti Krediidipank
OREANDA-NEWS. May 17, 2011. The Bank of Moscow is counting on a rapid conclusion to the conflict connected with the unsanctioned reduction in its stake in Eesti Krediidipank to 16.22% and on restoration of its shareholder’s rights to the previous 43.79%. Intensive negotiations are currently in progress with the management of Eesti Krediidipank to settle the situation out of court.
It turns out that the agreements on share sale and purchase and instructions from the Bank of Moscow transferring shares in favour of OLIX HOLDINGS LIMITED (Cyprus), LAZURON INVESTMENTS LIMITED (Cyprus) and FIRMEX INVESTEERINGUD OU (Estonia) were signed personally by former President of the Bank of Moscow Andrei Borodin and were dated 24 March 2011. The transactions did not, however, undergo the standard and mandatory registration and approval procedures, since information about conclusion of the transactions only reached the Bank of Moscow after the unsanctioned debit of the shares from the Bank of Moscow account in Eesti Krediidipank. Moreover, all the documents contain a series of similar violations, including use of the cancelled Bank of Moscow seal, which was withdrawn from use back in 2004. According to information at the disposal of the Bank of Moscow, the agreements were signed later than 24 March 2011, when A.F. Borodin had already been dismissed from his position and no longer had the powers of the Bank’s CEO.
The prices of the "sold" shares were set arbitrarily, without the business value appraisal required in such circumstances, this causing substantial material losses to the Bank of Moscow and its shareholders.
The management of Eesti Krediidipank, who bought up some of the shares for its affiliates (FIRMEX INVESTEERINGUD OU and Genovia Invest OU), were found to be interested parties in the disputed transactions. In addition, during formalisation, a gross breach was committed of the agreement with the Bank of Moscow on opening of a securities account and investment services with Eesti Krediidipank – the instructions to transfer Bank of Moscow shares to the above-mentioned group of companies were accepted for fulfilment though they were signed by someone not authorised to sign such instructions in accordance with the existing agreement between the Bank of Moscow and Eesti Krediidipank.
In aggregate, the given factors mean that the above-mentioned transactions may be recognised as invalid and that return of the shares may be claimed.
The management of the Bank of Moscow has applied to the Estonian Financial Supervision Authority for help in resolving the situation and hopes that the high standards of banking sector regulation and modern rules of law of the Estonian Republic and the European Union will allow the unsanctioned transactions to be abrogated and the shares returned to their rightful owner, the Bank of Moscow.
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