STANDING COMMITTEE RECOMMENDS NBM TO ALLOW FINCOMBANK REDEEMING ITS OWN SHARES

The parliamentary Standing Committee on Economy, Budget and Finance recommended on Tuesday to the National Bank of Moldova to allow the FinComBank participating in redemption of the new shares, issued by the latter.

Chairman of the FinComBank Board Victor Hvorostovschi reminded at the commission sitting that this year the shares of a number of bank shareholders were blocked, in July they were cancelled, while the bank issued equal amount of shares and put them for sale.

"We conducted a new issue, organized the selling and sent notifications to all potential buyers. Besides, the bank is obliged to buy the shares back if they are not sold within a month. Our shareholders proposed that the very bank to redeem these shares, but we faced a problem: the regulator maintains we do not have such right. From our point of view this violates our rights, as any physical or legal person may redeem them, meanwhile FinComBank, which has no restrictions or claims from the side of the NBM, has no right to buy these shares", he lamented.

According to the banker, all external partners frozen the contracts with the FinComBank for the entire period of canceling, issuing and selling of shares, as well as stressed they will resume the work with the bank only after the process of selling is concluded and the ultimate beneficiary is established.

"Due to this, the bank is suffering losses and the uncollected revenues, as well as the business projects are undermined, thus we would like to conclude this entire process earlier. Shareholders agree that the bank to use a part of its undistributed profit for the buyback. This will lead to lowering of the first-level shareholder capital, but most of money spent for share buying, will go into subordinated debt, while the bank capital will be preserved at the previous level", he explained.

Head of the Parliament Department for Legal Issues Ion Creanga said that the problem is connected with the Law on bank activity, which entered into force in February 2019 and is applied for the first time. Now, the resolving of this issue will influence the application of legal provisions in relation to other banks in future.

"First of all we have to understand if the bank was punished along with the dishonest shareholder, who was deprived of shares. We came to a conclusion that neither the bank, nor its shareholders are responsible for one dishonest shareholder. besides, the law does not import restrictions for the participation of the very bank in share buyback. Moreover, it obliges the bank to buy these if no one did. We see no legal obstacles for redeeming shares by the bank on equal conditions with everyone, but the final decision should be issued by the NBM", the lawyer said.

NBM representative said that if the FinComBank redeems its own shares now, the bank will have to spend much more money for this than after expiry of 6-month period. Besides, he confirmed that persons the NBM had claims to are not FinComBank shareholders anymore and cannot participate in share redemption.