Central Bank sends information to law enforcement agencies related to Bank Jugra operations
MOSCOW. July 10 (Interfax) - Russia's Central Bank has sent information to law enforcement agencies related to the operations of Bank Jugra , Central Bank Deputy Chairman Vasily Pozdyshev told journalists on Monday.
"There are grounds for this. I will not reveal the details of our communications now. We have sent letters to law enforcement agencies. They are related to the bank's operations," he said.
He also said that most of the Jugra Bank's credit portfolio went toward financing the businesses of the owners, according to the Central Bank's assessment.
"This morning the bank's main owner and top executives were in the bank's building because at nine this morning the temporary administration visited the bank and the transfer of authority took place," he said.
The head of the regulator's Banking Supervision Department, Anna Orlenko, said off-site supervision had been working quite closely with the bank as questions had arisen over bank's model of operations. "There were several groups of assets - oil and real estate. All borrowers had in their patterns of activity huge volumes of transactions in construction materials trade, which is strange in itself," she said.
Total turnover in those operations reached 300 billion rubles at one time. "And there was high turnover, about 86% of settlements between corporate entities, taking place within the bank. This also pointed to the fact that there might be technical companies that frequently move money between themselves to camouflage the real state," she said.
As a result of the supervisory work, restrictions were imposed at the bank, then there was an audit. "Because the bank is a very large one, a lot of work was done with it to improve its financial state, as the beneficiary said he was prepared to improve its financial state by providing security," Orlenko said.
She said the purpose of this work was to provide the bank with financial assistance, to increase its charter capital with real funds and provide liquid security that meets the regulator's requirements. "We assessed a huge amount of real estate and other structures. Unfortunately either the bank's valuation of these was over-inflated, perhaps by three times, or they were illiquid, or title [to the real estate] had not been registered properly," she said.
"We looked at some 20 plans made by the bank and they were not able to present us with one plan to prove that shareholders were in a position to improve the situation in such a way as to make the bank financially stable," Orlenko said.
