Russian court arrests Tatfondbank CEO over fraud case

KAZAN/MOSCOW, Mar 6 (PRIME) -- The Sovetsky District Court of Russia’s Kazan arrested Tatfondbank CEO Robert Musin late on March 3 over a fraud case until April 16, shortly after the bank’s license was revoked.

Russia’s 42nd largest bank by assets, Tatfondbank did not comply with laws on regulation of banking activity and the central bank’s regulations and conducted a highly risky lending policy, the regulator said earlier in the day.

Musin pleaded not guilty at the court hearing.

Investigators believe that in August 2016, employees of Tatfondbank provided fake data to the central bank about existence of a high liquidity asset ensured by loan agreements with other joint stock companies in order to receive a loan and subsequently embezzle money. Later, the received loan of over 3 billion rubles was transferred to accounts of Tatfondbank affiliates.

In December 2016, the central bank appointed the Deposit Insurance Agency (DIA) as an interim administration at Tatfondbank for six months and introduced a three-month moratorium on fulfillment of liabilities.

The central bank’s Deputy Chairwoman Olga Polyakova that the capital gap at Tatfondbank amounted to around 96.7 billion rubles as of February 1 and the bank’s bailout would require 220–230 billion rubles of borrowed funds.

During the entire 2016 the central bank cooperated with Tatfondbank over drafting a plan to restore the bank’s financial solvency, but the work did not bring sufficient results, Polyakova said.

Tatfondbank’s problems were connected with a business model focused mainly on providing lending to Musin’s business, she also said, adding that loans connected with his business accounted for 65% of the bank’s loan portfolio.

(58.9099 rubles – U.S. $1)

End