Moldovan Banking Scandal: Report Reveals Widespread Fraud and State Intervention

A recent report by Kroll has shed new light on a massive banking scandal in Moldova, revealing widespread fraud and state intervention. The report provides a detailed account of the fraudulent activities that took place in the country’s financial sector.

Widespread Fraud and State Intervention

The report highlights several instances of fraud, including the creation of fake deposits in Russian banks to provide collateral for new loans. These deposits did not exist and were falsely created in the books of the bank.

• The investigation has identified several individuals, including employees and managers of the bank, who are suspected of being involved in the fraud.
• The so-called “Shor Group”, a Moldovan-based entity, played a key role in the fraudulent scheme. However, the identities of those responsible for administering and executing the schemes have been withheld to avoid compromising the investigation.

Government Response Criticized

The Moldovan government’s response to the scandal has been criticized, with evidence suggesting that authorities were aware of the fraud but failed to act. In 2014, a series of legislative amendments were adopted to provide state aid to commercial banks in “situations of systemic financial crisis”.

• The amendments allowed for the provision of financial assistance under state guarantees and entered into force on October 10, 2014.
• A secret government meeting decided to provide financial assistance worth 9.5 billion lei to several Moldovan banks, but the details of the decision were not disclosed.

State Guarantees and Unsecured Loans

The report highlights a series of state guarantees provided to troubled banks, including a loan of 13.6 billion lei from the National Bank of Moldova’s (NBM) reserves. Critics argue that these measures may have been designed to benefit certain individuals or groups at the expense of the state.

• The NBM was tasked with distributing the funds, which were later revealed to have been used to grant unsecured loans to companies linked to the Shor Group.
• Former Prime Minister Iurie Leancă has stated that the government’s decision to provide financial assistance was an attempt to save the banks from bankruptcy. However, experts have raised concerns about the potential for abuse and corruption.

Call for Transparency and Accountability

The scandal has sparked widespread outrage in Moldova, with many calling for greater transparency and accountability in the banking sector. The full extent of the fraud and state intervention is still unknown, but it is clear that the situation is far more complex than initially thought.

• As the investigation continues, it remains to be seen what other secrets will be uncovered and how the government will respond to the allegations.
• It is essential for the authorities to provide a clear and transparent account of the events that took place and to hold those responsible accountable.