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Financial news
Bulletine Finance 

2017 August 11 ( Friday )  17:03:33
Print version
Русский Azərbaycan


All Guilty of Bank Standards Bankruptcy to Answer before Law - Akram Hasanov

Baku / 11.08.17 / Turan: The Chairman of the Bank Standard Committee of Creditors, expert in the banking sector Akram Hasanov said he was pleased with the new leadership of the Deposit Insurance Fund.

On his profile in the social network Facebook Hasanov said the new head of the Fund Vugar Abdullayev met with all the chairmen of the creditors" committees of bankrupt banks, including with him.

"A constructive dialogue took place between us. To my claims that the Fund's activity is not transparent, Abdullayev said they value public control and henceforth the Fund's activities will be transparent to the creditors' committee," Hasanov wrote.

The expert noted that the purpose of the Fund and the committee is single - the return of all creditors' money. In his opinion, for this purpose, it is necessary to work in three directions: to sell the bank's property by auction, provide repayment of loans issued by the bank and demand that the bank administrators that led it to bankruptcy and officials who closed eyes to that should compensate for the losses. At the same time Hasanov stressed that only in this case the banking sector will be able to restore confidence in itself. According to him, some work in this direction was started by law enforcement bodies.

"The creditors' committee, after collecting all the documents, will make claims against all those who are guilty of bankruptcy of the bank and will demand compensation for damages. These include the bank"s administration, the external auditor, and the Central Bank, which controlled them. The bank lacks 1 billion manats, according to the news. The question of where this money is has to be answered by those who managed the bank and the Central Bank. They will surely answer for this," Hasanov said. -----71D

Loss of Bank of Baku in H1 of 2017 Totals AZN 26.041 Million

Baku / 11.08.17 / Turan: The assets of Bank of Baku in the second quarter of 2017 compared to the same period of the last year decreased by 112.502 million manats or 19.1%, amounting to 474.884 million manats.

During the reporting period, the bank's liabilities decreased by 31% or 94.624 million manats and amounted to 428.030 million manats.

In particular, customer deposits decreased from 306.092 million manats to 304.435 million manats. The debt of Bank of Baku to the Central Bank of Azerbaijan for the specified time was reduced from 60 million manats to 20 million manats.

The bank's capital totaled 46.854 million manats (a decrease of 17.877 million manats or 28%).

In the second quarter, the bank's loss amounted to 14.397 million manats, and from the beginning of the year the bank suffered a loss of 26.041 million manats. -----71D

Uni Bank and LLC MIDA Agree on Cooperation

Baku / 11.08.17 / Turan: Uni Bank and LLC MIDA under the State Agency for Housing Construction signed a cooperation agreement.

Under the terms of the contract, citizens will be able to get soft loans for the purchase of social housing built by MIDA through the bank, using the AMF funds.

Earlier, MIDA signed a similar agreement with Capital Bank and Bank BTB. ------71D

Central Bank Plans to Raise 100 Million Manats at Deposit Auction

Baku / 11.08.17 / Turan: The Central Bank of Azerbaijan is planning to raise AZN 100 million at the deposit auction on August 14.

The funds are attracted for a period of 14 days, at an average weighted rate of 10.01% -14.99%.

It should be noted that deposit auctions are held within the framework of anti-inflation measures. The Central Bank of Azerbaijan started holding auctions in June 2016. ------71D

Bank Standard Lenders Appeal to Supreme Court Regarding Approved Plan for Bank Liquidation

Baku / 11.08.17 / Turan: The National Entrepreneurship Support Fund (NESF), which is a member of Bank Standard's creditors committee, will receive its funds out of turn, the liquidation plan of the Baku Court of Appeal said. This circumstance aroused dissatisfaction among other creditors and ended with the submission of a constitutional complaint to the Supreme Court of Azerbaijan.

In an interview with Turan, Chairman of Bank Standard's creditors committee, well-known human rights activist Akram Hasanov, told about this case and the results of the last meeting of creditors of the bankrupt bank:

- At the last meeting of the creditors' committee, the liquidation plan approved by the Baku Court of Appeal on the proposal of the Deposit Insurance Fund was discussed. Having read this document, the committee appealed to the Supreme Court with a constitutional complaint about the decision to approve this document.

- What caused the dissatisfaction of the creditors' committee?

- We have two formal reasons for this. Firstly, the bank's liquidation plan was approved, but the committee was not given an opportunity to get acquainted with it, which is a violation of our procedural rights. Secondly, the plan has not been completely approved. So, in the court decision it is said that this document consists of 39 pages, but in fact the number of pages exceeds a thousand. On this basis, we appealed the decision and took away from the court 39 pages of the document. In addition, the document itself contains details that have seriously worried us and, I must say, puzzled us...

So, let's start from the main thing - the fact that the bank has accumulated debts for 1 billion 10 million manats, while its assets are six times less - only 195 million manats (!). And the Insurance Fund, according to the liquidation plan of the bank, is going to return first the money of the National Entrepreneurship Support Fund in the amount of 20 million 300 thousand manats for some reason. I admit this is the most unexpected point.

- What is the reason for this decision?

- The fact is that the Entrepreneurship Support Fund is one of the creditors and does not differ from the others. Of course, we raised the question of why and on what basis the NESF should receive its money in the first place. It should be noted that in the bank's liquidation plan, the Deposit Insurance Fund notes that the reason for this decision was the special significance of this structure for the state and much more of that kind. We have already stated a strong protest against this at the last meeting of the committee. But most importantly, the NESF is one of the 28 members of the creditors' committee, although the representative of this structure was not present at the last meeting...

The second point that aroused aversion among creditors was the following: it has already been said that the bank"s loan portfolio is 741 million manats, while the Deposit Insurance Fund claims that it will be possible to return 155 million manats. The remaining funds are allegedly lost and cannot be returned. At the same time, it can be seen from the same liquidation plan that the Deposit Insurance Fund conducts legal proceedings against the bank"s borrowers for a total of AZN 200 million and the question arises why they do not try to return the rest of the money in court. Why is nothing done to return these funds?

- How did you explain this circumstance in the Insurance Fund?

- To the question of creditors to the Insurance Fund about why lawsuits are not conducted against the remaining borrowers, we were told that there was not enough time for it! And this is despite the fact that the Insurance Fund contains a very large staff of workers and does so with the money of creditors. You will be interested to know that the Financial Market Supervision Authority (FIMSA) approved the annual budget of the Insurance Fund for Bank Standard only in the amount of 3 million manats, i.e. this amount is spent by the Fund on conducting bankruptcy of the bank. Another question: how does it turn out that with a loan portfolio of 741 million manats, the Insurance Fund leads litigations for a loan of AZN 200 million and already claims that only 155 million manats will be returned? How can they say it, if they did not even start the process of returning these funds? I note that 60% of the loans were issued by the bank without any collateral...

Finally, I have already spoken about unconfirmed data about the last audit of the bank, which was dated 2013. So, in terms of liquidation, the Fund confirmed information that the last time the external audit of Bank Standard, conducted by KPMG, was presented for 2013. It is also reported that KPMG audit for the year of 2015 was not liked by the bank and was not accepted. As you can see, there are questions to the Central Bank, somehow not noticing the blunders revealed by the external auditor. In addition, the main bank of the country had no questions about the lack of audit in general... All this allows us to conclude that the Central Bank, unequivocally, is responsible for bankruptcy of the bank.

The liquidation plan also says that the situation in Bank Standard began to deteriorate, beginning in 2009, when its leadership began to go on different frauds and these frauds are listed in detail in the mentioned document. Undoubtedly, the CBA could not help seeing many designated items, and we can unequivocally say the CBA is to blame for bankruptcy of the bank. Proceeding from this, creditors will seek in court to ensure that the Central Bank reimburses the damage caused as a result of poor quality and unscrupulous control of the regulator. According to Article 68 of the Constitution of Azerbaijan, the state is responsible for the damage caused by its bodies or officials. And after the state reimburses the damage, it can demand these funds from specific individuals in the leadership of the Central Bank.

- Tell me, how did the relationship between the Insurance Fund and the creditors' committee change after the appointment of the new head of this structure in the person of Vugar Abdullayev?

- Vugar Abdullayev, appointed to the place of Azad Javadov, is the former deputy director of the State Treasury Agency of Azerbaijan. I know him as a literate and honest financier. But most importantly, unlike Javadov, he is not connected with the banking system, which allows us to hope for objectivity and transparency in the liquidation process. From this point of view, the President made the right decision, appointing a person from outside. In addition, this appointment says the country's top leadership takes the case under its control, appointing the executive director of the Fund, who is a person not related to this sphere, and therefore is impartial and objective. By the way, we have already met with the new executive director of the Insurance Fund, and he promised us full transparency. So let's hope for a better outcome.-0--

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