Bosnia's prosecutor indicts 16 people over $68 million bank scam

SARAJEVO, Feb 2 (Reuters) - A Bosnian prosecutor indicted 16 people on Thursday including the heads of a regional investment bank and banking agency, over financial crime and abuse of office which cost the banking sector 122.5 million Bosnian marka ($68 million).

The defendants are accused of organising a criminal enterprise to take control of Bobar Banka, and of illegally extending multi-million loans to members of the Bobar business group without guarantees.

“In this way, they caused financial breakdown of the bank and loss of deposits held in the bank by companies, government services and citizens,” the office of Bosnia’s prosecutor for organised and economic crime and corruption said in a statement.

The bank was declared bankrupt only last week by a court in the northeastern town of Bijeljina, where it is based, in Bosnia’s autonomous Serb Republic.

Many government institutions, including the Serb Republic development and investment bank and banking agency, tax administration, health funds, employment bureaus, utilities, pension funds and citizens have lost their deposits in the bank.

In March last year, police arrested and later released 10 people suspected of criminal activities in the bank which was shut late in 2014 after its shareholders failed to come up with a recovery plan after big losses were found.

Among the 16 defendants indicted on Thursday, who include the suspects who were briefly held last year, are the former head of the Serb Republic Banking Agency Slavica Injac and the ex-manager of the region’s Investment and Development Bank (IRB) Snezana Vujnic, as well as senior management of the Bobar Banka.

Problems in the bank were reported after its majority owner Gavrilo Bobar, a former Bosnian Serb businessman and member of the region’s parliament, died.

The Serb Republic banking sector posted a loss of nearly 80 million marka in 2015, down from 28.1 million marka profit in 2014, according to the region’s banking agency’s data. (1$ = 1.813 Bosnian marka)

Reporting by Daria Sito-Sucic; Editing by Dominic Evans