Bank of Russia (the Russian central bank) announced on Tuesday that it had revoked the licence of the banking operations of the Russian industrial bank.

“We were about to sign a deal with Lotus Capital and the central bank of Russia revoked the bank’s licence,” Laiki’s administrator Chris Pavlou said.

In a statement, the Bank of Russia (the central bank) said CB Rosprombank Co Ltd “implemented high-risk lending policy connected with the placement of funds into poor quality assets”.

The bank “failed to comply with legislation requirements and Bank of Russia regulations in countering the legalisation (laundering) of criminally obtained incomes and the financing of terrorism as regards the submission of adequate information to the authorised body,” it said.

“Both management and owners of the credit institution did not take any effective measures to bring its activities back to normal.”

SYKALA, the association representing some of the ex-Laiki depositors who lost bank deposits of more than €100,000 during the 2013 bail-in, stated that it was also concerned for the fate of other Legacy Laiki assets.

Laiki assets include Marfin Serbia and Romania, IBG in Greece, a subsidiary in Ukraine and a controlling share of Lombard Bank of Malta.

However, the value of Legacy Laiki’s assets has diminished over time, leaving very little to return to depositors.

The administrator revealed that the price of Rosprombank had tumbled to just over €1 million. This is a massive loss compared with the price at which it was bought.

Laiki bought the majority share of Rosprombank for €78 million in 2008. Management was complicated by the fact that the former owners were able to retain control.

Source: InCyprus