RIGA, Aug. 22 (Xinhua) -- The Latvian banking regulator has filed an insolvency suit against PNB Bank whose operations have been suspended since last Thursday, according to information posted Thursday on the Financial and Capital Market Commission's (FCMC) website.
The request to launch insolvency proceedings for the ailing bank were filed with a district court. The regulator has also asked the court to task lawyer Vigo Krastins with handling the insolvency process.
The FCMC announced last Thursday that the operations of PNT Bank have been suspended following the European Central Bank's (ECB) decision to recognize the bank as a failing financial institution and the Singe Resolution Board's (RSB) decision not to rescue the Latvian bank.
The banking regulator said in its statement that PBN Bank's direct supervisors, the ECB and RSB, had repeatedly applied supervisory measures to the Latvian bank to ensure its compliance with regulatory requirements and given an opportunity to strengthen its capital adequacy by a certain deadline, but the bank failed to meet the supervisors' requirements.
After assessing all the the information submitted so far, the regulator is not reassured about compliance with the supervisory measures, the FCMC said.
In March 2019, the ECB decided to take PNB Bank under its direct supervision at the Latvian banking regulator's request in the light of an ongoing legal dispute between Latvia and PNB Bank, which was heard at the International Centre for Settlement of Investment Disputes (ICSID).
In June 2019, the bank's key shareholder Grigory Guselnikov sold his stake in the bank to "EU & U.S investors" without naming the buyers. On July 30, 2019, Oliver Bramwell resigned as PNB Bank CEO.
As it later transpired, Guselnikov had sold the bank to the international gas and oil tycoon Roger Tamraz who had pledged to invest in the Latvian bank, but the FCMC said the rescue deal came too late.