Russian businessman behind shuttered Latvian bank PNB attacks ECB

FRANKFURT/RIGA (Reuters) - The Russian former owner of a stricken Latvian lender has attacked the European Central Bank (ECB) for abruptly shutting it, amid a bitter dispute after he previously accused an ECB governor of corruption.

FILE PHOTO: The skyline with its banking district and the European Central Bank (ECB) is photographed in Frankfurt, Germany, August 13, 2019. REUTERS/Kai Pfaffenbach

Grigory Guselnikov said he had found buyers for his stake in PNB Banka but the ECB had not given enough time to hand over ownership and inject capital, leaving the shuttered lender vulnerable to being “looted” in a hasty wind-up.

In an interview with Reuters, Guselnikov said the ECB, the supervisor, rushed through this week’s decision to shut it without good reason and had been motivated by his earlier claims that the Latvian central bank governor had demanded bribes.

His account was countered by the central bank. “ECB Banking Supervision, in its assessment that PNB Banka was failing or likely to fail due to significant capital shortfalls, acted in strict accordance with the rules,” said a spokeswoman.

The dispute over PNB’s closure comes more than a year after U.S. authorities accused Latvia’s third-biggest bank ABLV of money laundering and breaking sanctions on North Korea, prompting its closure and triggering the country’s worst financial crisis in a decade.

A corruption probe centred on Latvian central bank chief Ilmars Rimsevics has compounded the country’s image problems.

Guselnikov had more than a year ago accused Rimsevics of demanding bribes. Rimsevics, who has denied any wrongdoing, was detained last year and remains under investigation by state prosecutors, although he is still awaiting trial.

Rimsevics did not respond to a request for comment on Friday.


A top European court ruled that Rimsevics should not have been barred from office, in an embarrassing setback for the Baltic state.

“It is a shameful story for the ECB as well as for Latvia,” Guselnikov told Reuters. “That is why they don’t give ... a chance to save the bank.”

He said a group of investors were ready to step in with new capital, adding: “The ECB ... opens the door to loot the bank. The ECB may be responsible for the damage caused.”

In a statement PNB also disputed the ECB’s “sudden” decision, insisting it had met all regulatory requirements.

Roger Tamraz, a Middle Eastern investor and chairman of oil and banking group Netoil, said he and a handful of others remained willing to buy a stake and put up fresh capital worth roughly 140 million euros ($155 million).

“We asked for 90 days, not nine years,” Tamraz told Reuters, referring to the time needed to complete the paperwork for a deal. “If there is good will, we can always solve the problem.”

The ECB said it had acted according to the rules.

Since Latvia secured independence from Russia in 1991, more than a dozen of its banks had promoted themselves as a gateway to Western markets for clients in former Soviet states, promising Swiss-style secrecy.

That policy has now been abandoned under pressure from the United States, but despite predictions by Latvian officials a year ago that many would close, most of the banks are still open.

Latvia faces a review by international money-laundering standards watchdog Moneyval, which some officials fear could label the country as risky, alongside the likes of Serbia and Pakistan.

Reporting by John O’Donnell; Editing by David Holmes