October 2, 2015 / 11:21 AM / 3 years ago

Slovenia to sack head of its "bad bank" over excessive wages

LJUBLJANA, Oct 2 (Reuters) - Slovenia’s finance minister said on Friday he wants the government to sack the president of the country’s “bad bank”, which took over lenders’ bad loans, because of excessive wages paid to its directors.

Slovenia set up the Bank Asset Management Company (BAMC), or bad bank, in March 2013 as part of a general overhaul of its banks, enabling the country to narrowly avoid an international bailout for its banks.

Banks had been close to collapse under the weight of bad loans.

Swedish economist and banker Lars Nyberg was appointed president of BAMC’s board of directors and put in charge of wage contracts for the six directors other than himself.

Local media has recently pressured the government over the high wage levels. Of particular concern is the salary of BAMC chief financial officer, Torbjorn Mansson, whose remuneration was higher than other directors, according to local media.

Finance Minister Dusan Mramor said he will ask the government to sack Nyberg as wages were not in line with government rules, even after the government ordered BAMC in March to cut directors’ wages - which had been up to 13 times higher than the average wage in Slovenia - by 50 percent.

“The wages (at BAMC) are not in line with the wage policy. I lost trust in the president (of the board of directors) so I will suggest ... that he be dismissed,” Mramor told reporters.

Nyberg told reporters on Thursday that all payments where in line with legislation and that BAMC would fully comply with the government’s wage policy within two weeks. BAMC said on Friday the finance ministry had been informed about the wages of the directors at all times.

In March the national Court of Audit said that criminal activity may have been involved in the way Slovenia set up and runs its bad bank. BAMC has rejected most allegations and said the court’s report was “based on incomplete and incorrect findings”.

Last week the court said BAMC still had to introduce a number of changes to improve its business performance. (Reporting By Marja Novak; Editing by Susan Fenton)

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