An analysis of Central Bank reports shows that First Bank systematically broke a number of major laws and regulations governing the banking sector including banking law, anti-money laundering law, generally accepted accounting practices and reporting standards.
Then Finance Minister Igor Luksic promised that a bailout of First Bank would be overseen by regulators but instead, the first family’s bank was allowed to do whatever it wanted. And when it came time to pay back tax payers, the majority of the debt was simply switched to another governmental agency.
Vuk Rajkovic was one of the people in charge of overseeing First Bank’s operations and ensuring it was compliant with banking regulations in 2007. But Central Bank documents show his case represents one of First Bank’s flagrant violations of the rules.
Some of the loans given by First Bank were not issued according to proper banking practice, according to the Central Bank examiners. A significant number of loans, maybe even two thirds, were approved to family members, shareholders, business partners, and other parties connected to the bank, according to PricewaterhouseCoopers.
Former Prime Minister Milo Djukanovic hasn’t been truthful about where his consulting firm Global Montenegro got its startup loan. It came from his family controlled First Bank, the same bank whose mismanagement led to a taxpayer bailout. Other family members also got great deals from the bank.
First Bank financed a huge €4.6 million line of credit in 2008 for Svetlana Micunovic, wife of controversial casino owner Branislav Micunovic, without checking her finances, without collateral and without paperwork. They also gave Micunovic’s company Dzek Pot, which had posted significant losses for two years, a €200,000 loan guarantee without conducting any financial analysis or guaranteeing the credit.
Montenegrin taxpayers wound up footing the €4.3 million bill for Madonna’s Balkan debut in 2008. And the real company behind the event was First Bank, according to documents obtained by OCCRP. The concert not only broke promises that no public money would be used, it also depleted First Bank’s resources at a time it was already unable to honor requests for money from its own depositors.
Tens of thousands of KM have been withdrawn from several veterans’ organization accounts in Sarajevo without ever accounting for the money. The FBiH Financial Police’s investigation into five veterans’ organizations and their two firms found that most of the money was spent for the material expenses, paying employees and fees to the members of the management and supervisory boards.
Čapljina-based HDZ and former municipal officeholders incorporated a private firm then they gave it land, public buildings and government funds. The municipality had to pay the owner of the expropriated land and is now considering litigation against the firm.
The RS government gave loans to businesses of the Zahumlje and Herzegovina Diocese. However, most of the businesses in which the church has ownership interests are producing losses, and some are behind in their workers contributions.
Police say factory was owned by alleged money launderer but farmers are caught in the middle.
The new regulatory plan envisions offices and accommodation units where the Tobacco Factory is now in Banja Luka. Even though workers complained that the Factory’s buyer failed to honor privatization obligations, the RS only recently requested termination of the contract.
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