MOSCOW, February 8 (RIA Novosti) - A Moscow arbitration appeals court has upheld a decision to revoke the license of a bank whose former board chairman, Alexei Frenkel, has been charged with masterminding the murder of a senior banking regulator.
The small privately-owned VIP-Bank was stripped of its license in June 2006 for what the Central Bank said were violations of money laundering prevention laws, particularly delays in reporting transactions requiring checks by the financial watchdog. Risky credit policy and accounting violations were also cited by the country's main bank.
The court thereby turned down an appeal from three companies, the bank's shareholders, which Moscow's Arbitration Court previously declined in October.
Frenkel, who has been charged with organizing the murder of Central Bank Deputy Chairman Andrei Kozlov September 13, said in a letter he wrote a month before his arrest January 11 that he planned to expose a scheme which helped the Central Bank launder money through banks whose licenses it was going to revoke, business daily Kommersant said earlier.
In two letters that followed his arrest, Frenkel accused the CBR of accepting bribes for entering banks into the deposit insurance system. He said the bank had differentiated between banks automatically eligible for the insurance system and others that had to pay huge kickbacks to be enrolled. The bribes, he wrote, varied from $150,000 to $5 million, according to the size of the bank.
In his letters, Frenkel did not name officials involved in the illegal transactions and kickbacks but cited details on illegal schemes allowing them to be tracked down.
Seven people have so far been detained in connection with Kozlov's murder, widely described in the media as an honest official who led a crusade against money laundering and other criminal banking practices. Some of them have reportedly confessed to having been hired to kill the official.
The Arbitration Court is also considering a motion for VIP-Bank's bankruptcy. According to the bank's provisional administration, VIP-Bank's assets total 350.3 million rubles ($13.2 million), while liabilities amount to 703.4 million ($26.5 million). Creditors have already laid claims against the bank to 53 million rubles ($2 million).