Prosecutors freeze assets of Moldovan bank owned by largest Romanian lender and EBRD. European bank expresses ‘serious concern’

A Moldovan court has granted a prosecutors’ request to seize assets worth around 2.3 billion or 118 million euros from Moldova’s third-largest bank, media and the banks reported Wednesday.

Victoriabank has been controlled by Romania’s largest lender Banca Transilvania and the European Bank for Reconstruction and Development (EBRD) since 2018.

Prosecutors made the request in connection to a massive banking fraud in 2014 when more than one billion US dollars disappeared from three commercial banks, leading to their collapse and creating a hole worth around 12% of the gross domestic product.

The bank’s management expressed surprise about investigations into events that took place six years ago when the bank was under different ownership.

„In our opinion, Victoriabank, in its current form … has nothing to do with the case investigated by the authorities. To demonstrate this, Victoriabank is working with the authorities and awaits the next steps in the process,” Victoriabank said in a press release.

The EBRD said it learned „with serious concern” about the development and said it trusted „the investigation will respect clients and customers of Victoriabank as well as its current shareholders, and be carried out in accordance with due process and due consideration of potential consequences for the Moldovan banking system.

„Failure to do so risks destabilizing the entire financial sector with grave consequences for Moldova’s economy,” a statement said.

Victoriabank has a 17 per cent market share with around 540,000 customers and almost 100 branches across the country. At the end of 2019, the bank’s total assets amounted to 730 million euros, and accounted for 3.8 per cent of Banca Transilvania’s business.

The investigation has political ramifications.

Moldovan businessman Veaceslav Platon, who indirectly owns several banks in Moldova was reportedly forced by former Moldovan political leader Vlad Plahotniuc to sell him  and others the majority stake in Victoriabank, in 2014, Bursa reported.

After Plahotniuc lost the elections last year and fled the country, Platon who was serving an 18-year sentence for corruption was released from prison.

Chief prosecutor Alexandr Stoianoglo who instrumented his release said charges against hin were false. He has blamed Plahotniuc and central bank officials for the fraud. Stoianoglo was appointed by President Igor Dodon, a rival of Plahotniuc.

Although Victoriabank was not involved in the fraud, it was  one of three banks to subsequently placed under special supervisory measures by the country’s national bank. The measures were put in place to protect retail clients.


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