A Spanish judge said Wednesday contest voluntary creditors to Banco Madrid and decreed the start of its liquidation, following the investigation into the entity and its parent Banca Privada D’Andorra (BPA) for laundering offenses money from organized crime.
Both banks were intervened earlier this month after the US also opened an investigation into the BPA, which the Andorran authorities have had a number of restrictions, as the limit Cash withdrawal of 2,500 euros per week for your customers while looking for a permanent solution, which could pass for restructuring the bank.
The judge Carlos Nieto, a Madrid court proceeded to dissolve the bank and dismiss interim managers appointed by the Bank of Spain after his speech and after both entities suffered a “capital flight” as a result of the investigations.
In a ruling issued on Wednesday, magistrate appointed receivers to Legal and Economic Bankruptcy Administrators proposal of the Deposit Guarantee Fund and the State Agency for Tax Administration (AEAT) “because of public interest” to “social alarm” and “material injury” caused to customers of the company and its workers.
This decision comes after last Friday the Fund for Orderly Bank Restructuring (FROB) informed that there was going to rescue Banco Madrid, so the entity looked doomed to liquidation by the bankruptcy route and your customers receive a maximum of 100,000 euros per account, which does not mean they can not recover a greater amount completed the process.
The opening of the liquidation, said the judge in his car, “will the acceleration of deferred insolvency claims and conversion money from those that consist other benefits”.
In addition, the magistrate summoned to inform creditors the existence of their claims within one month.
The provisional administrators appointed supervisor frightened after Madrid Bank Council presented the application of competition on the 16th for being in situation ” imminent insolvency “.
Indeed, the alleged insolvency is of” special concern “given the” high number of customers who will be affected, “the request for settlement made by the entity itself and the consequences of” extreme gravity that all this may pose to the public purse “and particularly its customers and employees, according to the judge.
Banco Madrid has been exposed” to an exceptional situation, oblivious to regular controls supervisory authorities on its liquidity and solvency “, caused primarily by the United States prosecution to its parent, Banca Privada d’Andorra, of money laundering for organized crime, the judge said.
After opening a file by the Spanish financial intelligence service, the Sepblac, and “the possible initiation of proceedings” by the Anti-Corruption Agency, “precipitated a panic and distrust” of the customers of the bank, which caused a leak deposit, the judge said.
Considered that the leak would have “inevitable” that the entity have continued operating, it saw it impossible to continue regularly meeting their obligations required by illiquidity, and in particular to requests for withdrawal of deposits that have continued to occur.
The case erupted earlier this month after news that US GAP accused of laundering money from customers like the Sinaloa Cartel ; Gao Ping, the alleged ringleader of a Chinese plot; Andrei Petrov, an alleged member of the Russian mafia and Venezuela’s state oil company PDVSA.
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