The Slovenia Times

New attempt to prosecute C-bankers over bank bailout

Bank of Slovenia. Photo: Daniel Novakovič/STA

The Specialised State Prosecutor's Office has asked the court to investigate former senior Slovenian central bank officials over the taxpayer bailout of Slovenia's largest bank in 2013. According to the newspaper Delo, charges have been filed against four people, including former Bank of Slovenia governor Boštjan Jazbec.

The National Bureau of Investigation (NBI), a special police branch dedicated to fighting white-collar crime, filed a second criminal complaint against the former officials in May, and now the case has been picked up by prosecutors.

Confirming this for Delo, the prosecution was unwilling to disclose any more details, but Delo writes that the NBI is again alleging abuse of office after it accused the four of the same crime in 2016 in an effort that turned out to be a dead end due to procedural errors.

In addition to Jazbec, charges have reportedly been pressed against former Bank of Slovenia vice governors Stanislava Zadravec Caprirolo and Janez Fabijan, and Tomaž Čemažar, who was in charge of the bank bailout project.

The allegations involve irregularities in the bailout of NLB bank in 2013. NBI investigators seized Bank of Slovenia documents three years later, during an era when the central bank was headed by Jazbec, and then filed charges with the Specialised State Prosecutor's Office.

But the situation got complicated since Bank of Slovenia and the European Central Bank (ECB) opposed the seizure. The matter was brought before the EU court, which ruled that the inviolability of ECB archives had been violated during the investigation.

As a result, the NBI had to return the seized documents and restart pre-trial proceedings. Bank of Slovenia was requested to hand them over again, which it did, but only after redacting the parts involving ECB archives. Investigators then came up with the new criminal complaint.

The case has been centred around discrepancies in the valuation of a certain class of NLB's assets, with the gap exceeding €1 billion. The bank had reported over €800 million in assets in its balance sheets, while the central bank, using its own methodology, found NLB to be €317 million in the red, pointing to the need for insolvency proceedings.

This led to a number of measures at national level and many people lost their savings which they had invested in bank bonds and stocks, not just of NLB but also of other banks, foremost NKBM, which sold its shares to the public in an initial public offering in 2007.

Suspicions arose that Bank of Slovenia representatives were responsible for directing and influencing the asset valuation methodology for Slovenian banks.

Roughly 100,000 junior bondholders and shareholders were affected by the EU-instructed bail-in valued at €960 million.

Bank of Slovenia vice-governor Tina Žumer would not comment on the Delo report at the central bank's press conference on 20 December apart from saying that they were examining a draft bill put forward by the Finance Ministry earlier this year in a new attempt to provide legal recourse for those who lost their money during the bailout.

The offence of abuse of office is punishable by one to eight years in prison.

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