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Coronavirus could delay Desmond-backed bank's appeal over €80m fine

 

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Dermot Desmond

Dermot Desmond

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Dermot Desmond

A PLANNED hearing next month of an appeal by Latvia's Dermot Desmond-backed Rietumu Banka against an €80m fine levied against it by French authorities could now be delayed due to the continuing coronavirus lockdown.

Mr Desmond owns a third of Rietumu, with the billionaire having first taken a stake in the bank in 2005.

Rietumu Banka was found guilty in 2017 of aggravated money laundering by providing assistance, as a bank, to placement, concealment or conversion operations of the proceed of an offence.

A Paris court ordered the bank to pay an €80m fine and damages, jointly and severally with other defendants, of €10m to the French state and €100,000 in court expenses. Rietumu was also ordered to cease operations in France for five years.

Rietumu appealed the ruling, with a hearing due to have taken place last September. It was pushed back to next month, with hearing dates due on May 18, 19 and 20.

But with France now in lockdown, it is possible the appeal hearing will be delayed. "The bank believes to have a meritorious defence, and so it intends to vigorously defend its position," Rietumu told shareholders in its annual report published this week.

It expects the appeals process to last two or three years.

It added: "Among other things, the amounts the bank was sentenced to pay appear inflated and ungrounded, based on the understanding of the French criminal law by the bank and its legal advisers."

It said that if the ruling against it is upheld in France and Latvia, a "significant amount of judgment would be required" to estimate the amount of fines the bank would be ordered to pay in the Latvian court.

Rietumu has made a €34m provision in relation to the action.

In 2018, Rietumu terminated its banking relationship with more than 4,000 corporate customers it classified as being a 'prohibited risk'.

The move came after the United States accused the Baltic country's then third-largest bank, ABLV, of "institutionalised money laundering".

In its latest annual report, Rietumu said that it is now opening dozens of accounts every month for Latvian companies across all sectors.

"All of this confirms the correctness of the measures and plans that our bank has consistently put into practice over the last one and a half years, according to the new conditions and requirements implemented in the Latvian financial sector, taking into account the position of regulatory bodies and international partners," it added.

The group made a €21m profit last year. It said the bank "remains resilient" in the face of the coronavirus pandemic.

Irish Independent