Since August 2011 in partnership with BACEE we produce monthly review or Russian banking market. Main target of this activity is to keep our clients and contractors informed about current changes in financial sector of Russian Federation.
Up until now we shared only pdf versions of our reports but recently several clients mentioned that they hadn’t been able to trace if we have already published new monthly update or not. That is why we decided to publish every issue in a single post and believe that this procedure will ensure that every visitor will be able to check “what’s up in Russian banking” as soon as we send our new post to the blog.
You will find April 2012 issue of Russian banking news below.
HEADLINES AND IMPORTANT NEWS
CENTRAL BANK CONFIRMS SALE
The Central Bank is ready to launch the sale of a 7.6 percent stake in Sberbank, the country’s biggest bank, but no decision has been taken on timing, a senior official said Wednesday.
“In theory it [the placement] could take place at any moment,” the regulator’s first deputy chairman, Alexei Ulyukayev, told reporters.
“We are in a high state of technical readiness,” he added, declining to comment on price.
The sale of the stake, worth $5.5 billion at its current market valuation, could help the bank widen its investor base and achieve a fairer value. It would also trim the Central Bank’s ownership of Sberbank, on behalf of the state, to a bare majority.
Sberbank, Europe’s second-largest lender after HSBC, had planned to sell the 7.6 percent owned by the Central Bank last September but postponed the deal following a collapse in global equity markets.
Alfa Seeks VEB Loan to Buy Domodedovo
A1, the investment arm of billionaire Mikhail Fridman’s Alfa-Group, is seeking a loan to bid for Russia’s biggest airport Domodedovo, the investment company said on Tuesday.
A bid could be around $3 billion, according to Russian business daily Vedomosti, which earlier reported the news, and would rival a bid from another privately owned investment group, Summa Group, the paper said.
“We can say only that A1 sent to VEB a request for loan to buy Domodedovo,” a representative for A1 said in an email, referring to Russian state development bank VEB.
He declined to comment further.
A1 owns a diversified portfolio of investments ranging from retail and cinemas to steel and oil
Domodedovo’s billionaire owner Dmitry Kamenshchik attempted to list the airport on the London stock market last May, but canceled the initial public offering two weeks later after failing to get the right price.
Valuations for the airport were put at between $3.5 billion and $7.5 billion by Goldman Sachs and $4.2 billion-$5.3 billion by Citi during the IPO attempt, sources told Reuters at the time.
Vedomosti reported on Tuesday, citing an unnamed source, that A1 and VEB aimed to bid jointly for the airport.
According to Vedomosti, A1 will offer around $3 billion for Domodedovo, the same as Summa, which had agreed financing with state-controlled lender Sberbank.
The deal would be subject to approval by Prime Minister and President-elect Vladimir Putin, Vedomosti said.
Summa is involved in projects ranging from oil to telecoms and has stakes in two grain export terminals in Russia’s main deep sea port of Novorossiisk.
VEB declined to comment.
VTB Buyback ‘Bad Precedent’ – Kudrin
The Russian government set a “negative precedent” when it launched a share buyback program by the the state-controlled bank VTB, former finance minister Alexei Kudrin said
The Russian government set a “negative precedent” when it launched a share buyback program by the the state-controlled bank VTB, former finance minister Alexei Kudrin said on Thursday.
The lender, which is 75.5 percent owned by the government, announced the plans on March 2, exactly a month after Prime Minister Vladimir Putin told the bank to buy back the shares from investors who lost out in its 2007 initial public offering.
Kudrin, who resigned after a public falling out with President Dmitry Medvedev in September last year, said the move infringes on the equal rights of shareholders.
“The government established a negative precedent by this decision,” he told journalists in Moscow.
VTB CEO Andrei Kostin has valued the scheme at 15 to 18 billion rubles ($500 to 600 million).
The bank will buy out shares at the offering price of 13.6 kopeks, almost double the current price.
However, Kudrin said the rights of some shareholders were “limited” because the offer only applies to investors who acquired stock when VTB went public and still held them as of February 1 this year.
Bank of Russia approves Alexey Krokhin as Transcreditbank management board chairman
Effective April 6, 2012 Alexey Krokhin, as agreed upon with the Moscow Chief Territorial Directorate of the Bank of Russia, has been appointed president and management board chairman at Transcreditbank. The bank’s press service noted that he has performed the duties of the president since February 21 in line with the board’s decision.
Alexey Krokhin was born in 1971. He graduated in 1994 from the Finance Academy attached to the Russian Government with a degree in finance. In 1992 to 1999 he worked at JSB Incombank where he made a career from an economist to the head of the settlement center’s correspondent network development department, led the department of inter-bank operations and correspondent relations, ran the Incom-Znanie branch and held office as general manager at Incombank-Cyprus. From 1999 through 2001 he worked as an advisor and management board chairman at Aresbank. He joined Transcreditbank in 2002 as an advisor to the president of the supervisory board, was appointed a senior vice president and took the seat of first VP in 2004.
Transcreditbank is a backbone bank of the railroad monopoly with a wide network of branches. The bank was registered in 1992. The bank’s major owners are VTB Bank (77.78%), Russian Railways (21.80%) and other shareholders (0.41%). The bank focuses on serving companies affiliated with Russian Railways and, to a lesser extent, employees of its corporate customers. The lending institution’s interests also include operations on the securities market.
Based on Banki.ru data, as of March 1, 2012 the lender’s net assets stood at Rub 495.33 (12th in Russia), capital (calculated in line with CBR requirements) totaled Rub 62.56 bln, the credit portfolio amounted to Rub 338.71 bln and obligations to households equaled Rub 79.05 bln.
Financial statement: Gazprombank Group buys 46% of oil services group Eriell for Rub 3.8 bln
In December 2011 Gazprombank Group purchased a 46% stake in international oil services group Eriell Group International Ltd., the transaction price totaled Rub 3.75 bln, RIA Novosti wired quoting Gazprombank Group’s FY11 IFRS financial statement.
Eriell provides appraisal and exploration drilling services, and also well workover services to O&G companies, operates in Russia, Uzbekistan, Turkmenistan and Bulgaria.
IFC’s board approves investment in Credit Bank of Moscow
The International Finance Corporation’s BoD approved a cash injection into the capital of Credit Bank of Moscow, an IFC representative told Prime-TASS on Friday. “Last night this issue was reviewed and approved,” said the news agency’s respondent adding he is not aware of any details.
At present, the sole shareholder of Credit Bank of Moscow is Concern Rossium LLC, a company owned by entrepreneur Roman Avdeev.
In March 2012 IFC reported that it is exploring an option to directly invest up to Rub 2.9 bln in the bank’s capital.
IFC’s investment will help Credit Bank of Moscow to expand and serve its SME clientele, roll out business outside Moscow, diversify and solidify its capital base and encourage investors to buy into the bank in light of an upcoming IPO, the International Finance Corporation noted in a press release.
At least four Russian investors mull buying Absolut Bank
At least four Russian investors that lay claims to buy Absolut Bank are prepared to help Belgian group КВС leave Russia. A decision to this effect could be made in the next few weeks, Vedomosti business daily wrote.
Belgian group KBC said it could sell Absolut Bank back in autumn 2009. During the crisis the group was provided with a €7 bln bailout package on the condition it will cut assets outside the EU. “In line with the plan for 2012—2013 we plan to sell banks in Russia and Serbia,” KBC Group CEO Jan Vanhevel said in an interview with Vedomosti. KBC representative Virginie Lauwers assured that nothing has changed since then and KBC abides to this plan. However, the group has not yet taken a final decision to sell Absolut Bank.
“It is expected to be adopted in the near future,” said a source close to the bank adding the decision could be made within several weeks. Prior to this the group does not run the risk of showing its assets to potential buyers, the same source assured, which is a surprise for some of them. Until now the most active bidder has been Otkritie FC which, according to the source, even hired an advisor for a potential deal. The interest has also been displayed by entities affiliated with Igor Kim and Nomos-Bank, the source added. Another banker heard that Mikhail Levitsky, a co-owner of Bank Stroycredit, is also among potential bidders.
“We’re waiting for KBC’s final decision that in principle the group is ready to sell Absolut Bank,” Levitsky confirmed in an interview with Vedomosti and noted that “we began to explore the option of transacting a deal last year and thoroughly examined the bank”. He assured that the bank is prepared to conduct due diligence, as it understands the structure, the transaction price and those obligations that it would assume in case of its acquisition.
We showed our interest in Absolut Bank back in November 2011 and it is still in place,“ said a source at Otkritie FC. The corporation’s shareholders wait “when the Belgians make a decision on the deal”, the source noted. “In a couple of weeks KBC should approve a schedule for the deal, and also price targets, the paper’s respondent said. “Otkritie FC is prepared to pay for Absolut Bank “in any case less than its capital,” the source said. A representative of Nomos-Bank and Igor Kim declined to comment. Otkritie FC representative Alexey Karakhan only said that the group plans to acquire a bank that is comparable in size with Bank Otkritie, but the group makes no haste on this front.
The sale of Absolut Bank could turn into losses for KBC as the bank was sold to the Belgian group for $1 bln (nearly 4x of capital) in 2007. Nobody paid more for Russian banks ever before. “Likely, for this reason Brussels is not in a hurry to sell the bank, looking for the best season,” one of the newspaper’s respondents said.
VTB 24 to Spend $385M on People’s IPO Reversal
VTB, whose logo is seen on a hot-air balloon above, will spend a total of 11.4 billion rubles to buy back 83.3 billion of its shares.
A retail unit of state-controlled lender VTB said Tuesday that it had finished collecting bids from small investors who purchased the bank’s stock in 2007 and faced losses due to the price decline, with 65 percent of shareholders having tendered their shares.
A total of 74,302 shareholders, who participated in the bank’s so-called people’s IPO — including both individuals and legal entities — had tendered their shares by the Friday deadline, said Mikhail Zadornov, president of VTB 24, which was in charge of the emission.
The bank will spend a total of 11.4 billion rubles ($385 million) to buy back 83.3 billion of its shares, he told reporters at VTB 24’s office, adding that the effect on the bank’s capital at those costs will be insignificant.
The heavily promoted offering, which VTB made in May 2007, attracted $8 billion but left more than 100,000 retail investors in the hole after the company’s shares slid by nearly 50 percent from the IPO price of 13.6 kopeks ($0.005) per share.
The country’s second-biggest lender promised to buy the stock back at the offering price after the measure was proposed by Prime Minister Vladimir Putin earlier this year.
VTB made the offer to the shareholders that remained in its register as of Feb. 1 this year, and Zadornov said in February that this accounts for 114,000 shareholders, with 105,000 of them able to sell their packages in full.
About a half of the 40,000 retail investors who didn’t tender their stock hold very small packages worth less than 1,000 rubles, which they might have considered insignificant, Zadornov said, adding that management of the VTB Group had also agreed not to tender the stock.
The other 20,000 shareholders owning big packages didn’t tender them “for various reasons,” Zadornov said. The maximum size of packages that investors could tender during the buyback was 500,000 rubles.
For some investors holding big packages this sum might be too insignificant to deal with the paperwork for it, said Alfa Bank analyst Eldar Vagabov.
The funds for the stock will be transferred to shareholders’ accounts by the end of this month.
Zadornov said VTB 24 plans to propose that investors participating in the buyback deposit up to 700,000 rubles at 9.25 percent a year, as the lender hopes to retain on its balance sheet “a few billion” rubles of the sum spent on the buyback.
But he acknowledged that people prefer to spend money rather than save it, with the banking sector seeing a modest 0.9 percent growth of funds on individuals’ deposit accounts in the first quarter of this year compared with a rise of 6.5 percent in the size of retail loans provided.
One possible reason for the growth in retail loans is that people are becoming more confident in their future for the next couple of years due to rising incomes and declining unemployment, Zadornov said.
If the current trend continues, the market for retail loans might grow more than 30 percent this year, he said.
Sberbank Share to Sell After Inauguration
The privatization of 7.6 percent of Sberbank could happen later in the year, Deputy Prime Minister Igor Shuvalov said Monday, as expectations that the sale will go ahead before May’s presidential inauguration fade.
Reports suggested that the much-delayed privatization was likely to take place this April as Sberbank’s share price breached a 100 ruble ($3.40) threshold set as a selling condition by the Central Bank.
But with shares in Russia’s biggest lender trading at about 92 rubles Monday, the moment appears to have passed.
“Sberbank had some great opportunities, and we wanted to do everything,” Shuvalov said, RIA-Novosti reported. “But we didn’t go for it because we didn’t want to show that we will hurry and scuttle around like lice.”
First Deputy Prime Minister Igor Shuvalov
The privatization of a holding in Russia’s biggest lender is considered a trailblazer for other state-owned companies and a proxy for the country on international markets. It was delayed in September 2011 as equities nose-dived in a global sell-off.
Shuvalov said it might yet happen this year because “there will be a little window in the summer and fall.”
The Central Bank owns 57.6 percent of Sberbank and after the planned sale it will continue to control a majority holding, but by a margin of one share.
In an indication of dissent within Prime Minister Vladimir Putin’s Cabinet about the timing of the move, Shuvalov said last week that the sale might not happen until 2013 or 2014, although he favored it being pushed through this year.
He reasserted this commitment Monday. “We really want it to go ahead in 2012,” Shuvalov said. “Of course we will facilitate this, but we don’t want it to be a run-of-the-mill event.”
Sberbank president German Gref has been noncommittal about the timing of the sale and said in March that it was just as likely to happen this year as next.
Sberbank was “morally ready” to step aside to let VTB, the country’s second-biggest financial institution, go ahead with its own privatization scheduled for 2012 first, Gref said Friday.
Sberbank Funds VBI
Sberbank will provide up to 300 million euros ($394 million) in fresh capital for its new VBI Eastern European arm this year to finance expansion, VBI chief executive Friedhelm Boschert said Tuesday.
He also said VBI made a profit in the first quarter after posting losses last year.
VBI’s current three-person management board was confirmed for three-year terms. Sberbank is adding corporate finance expert Maria Bykova and strategy man Valentin Mihov to senior VBI management, the bank said. Austrian businessman Siegfried Wolf is supervisory board chairman, and Sergei Gorkov is deputy chairman of VBI.
IKEA to Open Bank in Russia
Sweden’s IKEA, the world’s largest home furnishing products seller, is to open its own bank in Russia
Sweden’s IKEA, the world’s largest home furnishing products seller, is to open its own bank in Russia, Kommersant business daily reported on Friday quoting market sources.
The deal will be implemented by Ikano Group, which used to be part of IKEA group, and Credit Europe Bank N.V., which currently cooperates with IKEA in a joint venture on a parity basis.
Ikano’s branch in Russia declined to comment, while Credit Europe Bank Russia confirmed the information to the paper, saying the equity capital of the new bank would amount to 300 million rubles ($10.2 million).
The new bank, scheduled to be launched in 2013, will work with corporate clients of IKEA in Russia and its partners at first, and two year after will start to offer customer credit in IKEA stores, the source told Kommersant.
“The setup of the bank on a parity basis will allow the Swedish company to cut initial expenses in banking product development and benefit from the successful entrance of Credit Europe Bank to the Russian market,” Yulia Shirokova of NEO Center consulting group told the paper.
CHANGES IN CURRENT LEGISLATION
New type of bank account to appear in Russian Civil Code
The new category of a bank account (an escrow account) will appear in the Civil Code of the Russian Federation. The amendments to the Civil Code were presented to Russian President Dmitry Medvedev on Monday.
An escrow account is a special account designed for the exchange of property, documents or money with the involvement of a third party, which may be a bank. Money or property is to be transferred from this account when certain circumstances occur or certain obligations are fulfilled. Traditionally escrow accounts are used when two or more parties enter into exchange relationships, in particular, they are broadly used in the United States in real estate transactions.
“As part of the measures to establish an international financial center in Russia the project will supplement the code with a new type of an agreement (an escrow agreement). Furthermore, a new category of a bank account (escrow account) is to be introduced,” Minister of Justice Alexander Konovalov, who leads the working group in charge of fine-tuning amendments to the Civil Code, told journalists at a briefing.
According to him, a draft federal law on making amendments and additions to the Civil Code also stipulates to regulate new categories of bank accounts, such as accounts held in precious metals, a joint account, a nominal account, an accumulative account of a newly established legal entity, a public deposit account and a card account.
Civil Code amendments to change finance laws dramatically
Amendments to the Civil Code will considerably change provisions on financial transactions, according to a press release issued by Pavel Krasheninnikov, the head of the State Duma Civil, Criminal, Arbitration and Procedural Legislation Committee.
President Dmitry Medvedev said on Monday that he had submitted to the lower house Civil Code amendments related to fundamental civil law institutions. The amendments were being prepared for several years and are needed because the economic life has significantly changed over the 15 years since the codes first section was adopted.
The draft law provides for differentiated loans regulation depending on their structure and purpose, as well as special protection for individual borrowers. Individuals will now be entitled to an early repayment without the lender’s consent.
Consumer loans will be regulated by special provisions giving customers additional rights to receive information on the loan terms and conditions. Borrowers will also be able to give up the loan within 14 days after the loan agreement is executed.
According to the expert, most radical amendments concern bank account agreements. The bill will introduce precious metals bank account, joint and nominal account and newly established entity accretion account agreements.
Bank of Russia could allow subsidiaries of foreign banks to open branches without approval
The board of directors at the Bank of Russia could give permission to subsidiaries of foreign banks to open branches in Russia without seeking approval, the regulator’s draft instruction said.
At present, in effect is the Bank of Russia’s Statute 437 dated April 23, 1997 “On Peculiarities of Registration of Lending Institutions with Foreign Investment”, according to which a subsidiary lending institution of a foreign bank is entitled to open branches in Russian territory only after the receipt of a prior approval. To obtain an approval a subsidiary submits a relevant application to a territorial division of the Bank of Russia or a relevant operating directorate (OPERU-2).
During 15 days or so the regulator’s territorial division or OPERU-2 submits to the Bank of Russia’s department for licensing of banking and audit activities a report with information on a lending institution’s financial standing and substantiation that the opening of a branch is advisable.
When reviewing the issue about the opening of a branch by a subsidiary lending institution of a foreign bank the Bank of Russia could seek additional information on operations on a lending institution that is required for decision-making.
Fraud draft law submitted to Parliament
The bill clarifying different types of fraud, including card fraud, has been introduced to the State Duma.
The Criminal Code will be supplemented by six subsections to the fraud provision which will describe in greater detail loan and drawdown frauds, payment cards fraud, investment fraud, insurance and computer information fraud.
The bill is designated to distinguish between different types of fraud rather than to toughen the punishment for the offence.
Fines are supposed to be increased for only large-scale fraud or fraud resulting from abuse of office.
Custodial punishments and fines are also proposed for those who defraud investors of the invested funds by abuse of their confidence, particularly through pyramid schemes.
According to the Supreme Court more than 25,000 individuals are convicted annually on fraud charges. It means that fraud is one of the most widespread crimes.
Vladimir Putin orders MinFin to tighten control over credit rates and fees
Russian Prime Minister Vladimir Putin ordered the Finance Ministry of Russia to tighten control over rates on bank loans and set things clear with hidden fees. “I request the ministry to tighten control over rates on credits granted to both businesses and households,” he said addressing the Finance Ministry’s enlarged collegium.
“We should not simply monitor what’s going on. We need to understand what causes banks to artificially inflate rates on loans issued to businesses, including via hidden fees. A system-wide solution should be found here,” the prime minister added.
He noted that the Finance Ministry of Russia was provided with additional powers and authority to regulate the financial markets, and said the ministry had already been ordered to monitor interest rates on bank credits on a quarterly basis.
Furthermore, the prime minister requested the Finance Ministry to speed up the submission of the draft law “On Consumer Loans” to the government. According to him, the law should fix a citizen’s unconditional right to know the total and real cost of a credit. “So that it does not happen when one number is written on the first page of a loan agreement, but in fact, together with any hidden surcharges, markups, another amount is to be paid,” Putin said.
According to him, the borrower should have the opportunity to pay back a consumer loan ahead of schedule without paying any penal sanctions.
Draft law on consumer lending to be brought to Duma in May
A new version of the draft law on consumer loans will be submitted to the State Duma as early as May, Deputy Finance Minister Alexey Savatyugin told the newspaper.
“The text will be completely prepared in accordance with an order that the president-elect gave at a meeting held by the Finance Ministry’s enlarged collegium on April 17,” said Savatyugin adding that, in particular, a provision in principle for the ministry will be that a borrower has the opportunity to repay a credit ahead of schedule without any fees, and also to give the borrower full information on the value of a credit.
For many years already the Finance Ministry has worked over the draft law that would regulate relationships between creditors and individual borrowers. Meanwhile, the elaboration of this document was stipulated back in the banking sector’s development strategy for the period until 2008. The draft law was brought to the government several times, but it was rejected every time.
The latest version of the document was to be filed to the State Duma in autumn 2011. But it was lambasted by experts of the President’s state legal department, the Federal Anti-Trust Service (FAS), the Supreme Arbitration Court and Rospotrebnadzor. Criticism ran that there is no need to multiply overlapping legislative acts. As a result, many provisions protecting a borrower were incorporated into various existing laws (“On Banks and Banking Activity” and “On the Protection of Consumer Rights”) that bankers now know how to bypass.
New amendments that the Finance Ministry has compiled to date are designed to deprive banks of the opportunity to unilaterally amend terms of loan agreements. Innovations would also outlaw a number of fees and would oblige a creditor to specify the full value of a credit on the first page of a loan agreement in a special box equaling 15% of the page.
“The current practice is the following: a credit manager tells a future borrower that “this number is the value of a credit, and this one is for us to submit to the Bank of Russia,” said deputy FAS head Andrey Kashevarov adding that “only later the borrower learns that this is the very value of a credit”.
Government allows DIA to put funds in CBR deposit accounts
The Russian government has supplemented regulations for the investment of available funds of state-run corporations and state-run companies, allowing the Deposit Insurance Agency (DIA) to put funds in deposit accounts at the Bank of Russia, showed the government’s order that was posted in the database of federal statutory and regulatory on Monday.
DIA is the only state-run corporation, for which the right to put funds in a deposit account at the Bank of Russia was introduced by law, but it has formally been deprived of this right starting January 1.
Regulations for the investment of available funds of state-run corporations and state-run companies were approved in late December 2011. When approving the document that took effect on January 1, 2012, DIA’s right to put money of the deposit insurance fund in deposit accounts at the Bank of Russia was cancelled. At the end of 2011 the Central Bank of Russia held on its deposit accounts around Rub 10 bln of the deposit insurance fund’s money, while the deposit insurance fund equals around Rub 135 bln.
“As the Bank of Russia’s deposits are a permissible asset (investment vehicle) for the investment of available money of the mandatory deposit insurance fund in accordance with the Federal Law “On Insuring Retail Deposits Held at Banks in the Russian Federation”, then this permissible asset (investment vehicle) is proposed to be added to the list of permissible assets (investment vehicles) that is approved by the regulations,” said an explanatory note to the government’s draft order that was compiled by the Finance Ministry.
Previously DIA head Alexander Turbanov pointed out that the agency badly needs this instrument in case of substantial payments. A deposit account at the Bank of Russia provides profit and liquidity, and if the money is simply held on an account at the Bank of Russia, DIA will be losing money because of inflation, he noted.
BANKRUPTCY AND LEGAL CLAIMS
The Kolpino Logistics Park
the Deposit Insurance Agency (DIA) and the Investigative Committee
AMT Bank sues logistics park for over $100 million
The Moscow Commercial Court will hear two lawsuits filed by Moscow-based AMT Bank against The Kolpino Logistics Park on May 31. The bank is seeking to recover 65.7 million euros and 1.648 billion rubles ($55.6 million).
The defendant’s representatives failed to attend the hearing. In its statement regarding the 65.7 million euro claim the bank said that Kolpino was granted a 40 million euro loan in October 2008. The loan was to be repaid on April 12, 2009. The company partially repaid the principal debt but failed to meet its obligations in full. The bank consequently sued the defendant for 34 million euro for the principal and interest on the loan. Concerning the other claim, the plaintiff said they were seeking to recover 823 million rubles ($27.7 million) in principal debt and interest under another loan which was not repaid on time.
The bank told the court that it had notified the defendant about the payment periods. However, the notification letters were sent back stating that no such recipient was located at that address.
The Kolpino Logistics Park near St. Petersburg was established by Eurasia Logistics. The size of the park is roughly 580,000 square meters. Eurasia Logistics is a major Russian industrial and warehouse property developer owned by Kazakh businessman Mukhtar Ablyazov. It is part of the Eurasia Investment and Industrial Group. It has implemented the A-class Kolpino project since 2005.
AMT Bank (previously known as BTA Bank) is a multipurpose financial institution with 9 branches and 26 offices. According to the RIA Analytics Economic Research Center, AMT was ranked 71st in terms of assets as of April 1, 2011.
The Moscow Commercial Court upheld the Central Bank’s petition for ATM Bank’s bankruptcy in October 2011. The Deposit Insurance Agency (DIA) was appointed to act as the receiver of the failed bank. The Central Bank revoked AMT’s license in July for forging account data. The banks deposit portfolio amounted to 15 billion rubles ($499.41 million). According to the DIA, it will pay a record 13 billion rubles ($432.82 million) to AMT’s depositors.
According to information on the bank’s website, Ablyazov directly holds 19.7 percent of the credit institution. Ablyazov has been living in the United Kingdom since 2009. The police opened a criminal case against him on suspicion of fraud and withdrawal of funds through shell companies.
$609k lawsuit by convicted banker shelved
The Moscow Commercial Court has shelved until May 10 a lawsuit filed by Alexei Frenkel, convicted in the murder case of Central Bank First Deputy Chairman Andrei Kozlov in 2006, against the Deposit Insurance Agency (DIA) and the Investigative Committee for $608,700.
The Moscow City Court returned a guilty verdict and Frenkel was sentenced to 19 years behind bars on November 13, 2008. He was also ordered to pay 10 million rubles ($338,000) to the victim’s father.
Kozlov headed the Central Bank’s supervisory division and was the DIA founder. His responsibilities included banks selection for the deposit insurance system and banking licenses’ revocation.
The attempt on Kozlov’s life took place on September 13, 2006. His driver died on the spot and Kozlov died next morning at a hospital.
Frenkel was the VIP Bank chairman. His bank forfeited its license in 2006 for multiple violations of the money laundering legislation. According to the case records, Frenkel was also associated with the establishment of Sodbusinessbank, which also lost its license.
In the jury’s view, investigators managed to prove that Kozlovs activities to revoke banking licenses from the violators inflicted multimillion losses on Frenkel.
Case materials read that Frenkel paid $300,000 for Kozlov’s murder. Of this amount, the killers received from $3,000 to $8,500 and the intermediaries received $80,000 or more.
Russia’s largest bank seeks $47.4 mln from fruit supplier in court
The St. Petersburg and Leningrad Region Commercial Court has registered Sberbank’s lawsuit against Cargo JFC (part of the JFC group) to recover $47.4 million of debt.
The trial date has yet to be set. JFC, the head company of the group, has been brought into the case as third party. It went into administration in March.
According to JFC, Cargo JFC, like Bonanza International, whose bankruptcy case is scheduled for hearing on May 15, acted as borrowers under a syndicated loan facility of up to $88 million and 1.5 billion rubles ($51 million).
The loan agreement was approved by an extraordinary meeting of JFC shareholders on March 9, 2011. The loan arrangers included Raiffeisenbank, Sberbank, Amsterdam Trade Bank, UniCredit Bank and Banque Societe Generale Vostok.
Raiffeisenbank and Sberbank have requested a commercial court to have their claims entered into the JFC schedule of creditors. The court records have not yet specified the debt amount that these creditors want to be included in the registry.
JFC faced severe financial trouble due to the turmoil on international markets, as major fruit suppliers went bankrupt as a result of the Arab Spring, among other reasons.
JFC reported earlier that it sold up to 30 percent of its products to southern Mediterranean countries and sustained substantial losses in 2011 due to disrupted business relations, market share loss and unrecoverable debts.
Established in St. Petersburg in 1994, the JFC Group comprises fruit production, procurement, storage, transportation and sales companies. According to JFC, it is the largest fruit supplier to the Russian market.