President of the Republic of Moldova
Dear Mr. President, I write this message to you to protect the public interest not as an official, but as a citizen. The matter is of public interest indeed and it might have a major impact both on national financial security and on the interests of the people. Back in June 2012, when I wrote about it to the Supreme Security Council (annex), being in an official position of public dignity, the State, or should I rather say some State entities, intervened promptly and in exactly a month a case was filed in court against me, so that I give up any idea about writing something again. However, everything I had been warning about back in 2012 happened in 2013 and the State was looted. The issue of Banca de Economii is back on the table and now I am warning you about the State’s ‘regaining’ of the bank. First, there is no regaining and there is no bank left! All the State gets is a huge burden.
- My guess is that there has always been a backup scenario involving the minority shareholders. The players had a plan that the Supreme Court of Justice would rule at the right moment if circumstances require it. This, I think that somebody has prepared a coup of grace for somebody else, both being involved in the initial scenario.
- The events last week, which took place only a couple of days before election, are: on Thursday, November 27, the SCJ rules to restore, indirectly, the State’s ownership over 56.1 percent of BEM shares, in a lawsuit started by a group of individual shareholders; on Friday, November 28, NBM orders special administration of BEM because of the financial condition of the bank. Both events are hushed, so that neinther the public nor the press finds out, and officials refuse to talk before elections.
- Logically speaking, why hasn’t NBM order special administration before the SCJ ruling? Or let me put it another way: why did the SCJ’s ruling come first and NBM’s special administration came second? NBM has enough evidence to take a decision much earlier, even before the election campaign started. On the other hand, it doesn’t take much expertise to see that the SCJ’s ruling was rushed and is deficient. Well, if that matters in any way to anybody now.
- Here is the answer, Mr. President:
if NBM had ordered special administration as a first step, the new shareholders that got ownership initially through 2011 raider attacks and later in 2013 by ‘capitalization’ without state participation, would have been the ones blamed for poor management of the bank, and the mending of the hole of about MDL 11 billion would have been their responsibility, including all consequences.
on the other hand, by implementing another scenario last week – SCJ returned BEM to the state and immediately after that NBM ordered special administration – we, as a country, Mr. President, have ended up with a huge problem – the new shareholders that came/have been brought in 2011 and 2013 may appeal the ruling in international courts and request reparation of damages by the state, for nationalizing their property without their consent. Otherwise – if NBM’s decision had come first, followed by the CSJ ruling – no claims of compensation of damage regarding ‘lost investment’ would have been possible.
- Let us also not forget, Mr. President, where the investors – who might claim damages – come from. They come from a country in which local legislation allows for ‘applying all possible methods and means to protect the economic interests and property and investments abroad’ when it comes to its residents. It is the country that authorized aggression and infringement on the territory of a neighboring country.
- Recent amendments to Moldovan legislation on financial and banking regulation provides that Moldova assumes responsibility for all financial claims that might arise in difficult situations involving certain banking institutions. Hence, the budget – already running a deficit – is exposed to major risks. If NBM reserves will be used to resolve the issue at the first stage – no other solution seems feasible at the moment – we risk even more exposure as a state. We will end up with a weakened central bank in the midsts of regional financial uncertainty. Let me also remind you that there are already two banks under special administration. I would not rule out another one, the one BEM wanted so badly for itself, i.e. for the State, if we follow the logical sequence of events.
Dear Mr. President: There is sufficient evidence that clearly shows the character of BEM-related development during a quite long period (2007-2014). I made the issue public in 2012. Nobody would listen then. If you deem it necessary, it might be a good time to summon a meeting of the Supreme Security Council. And if you believe that my participation might be of use, please do not hesitate to let me know about it. People have chosen Europe! I request now, as a citizen of this country, that you protect us, the people of Moldova! You have powers and obligations enshrined in the Constitution of the Republic of Moldova. Do take into account the people and take care them! And I do not mean lavishing on them medals and badges now.
citizen of the Republic of Moldova
Minister of Finance during 2009-2013
December 2, 2014