The company Kroll, which carried out a preliminary investigation into the theft of money from three Moldovan banks, in its report says a full forensic trace of the beneficiaries of funds is required, in order to identify the true extent of beneficiaries to transactions, and apply an appropriate legal strategy to recover funds fraudulently dissipated, IPN reports, quoting an unofficial translation of moldova.org.
The report says that between 2012 and 31 October 2014, the exposure of companies deemed part of the Shor Group increased dramatically from MDL 1.1 billion to MDL 8 billion. This comprised what appears to have been initial, genuine lending activity which, as time progressed, was characterized by a complex series of transactions, whereby loan funds were passed amongst the banks, between entities, via foreign entities using Latvian bank accounts. The structure of the transactions and overall scheme was designed in an attempt to deliberately disguise the true nature of lending activity and maximize available credit. The general profile of these loan customers was not typical of normal commercial transactions and the level of connectivity between the entities demonstrates a deliberate effort to disguise true exposure of the banks.
Kroll says a full forensic trace is required, in order to establish the ultimate beneficiaries of the MDL 8 million in exposure of Shor Group companies as of 31 October 2014 and how this developed over time. It is however clear that Ilan Shor, and individuals with which he is associated, are strongly implicated in the scheme. Between 1 November and 24 November, Shor Group exposure increased by a further MDL 5 billion, as a result of a massive increase in lending within Banca de Economii (BEM) to four companies: Provolirom SRL, Dracard SRL, Caritas Grup SRL and Voximar Grup SRL. The precise reasoning for the actions taken within this period are uncertain; however it is evident that at this point, there was a concerted effort to extract capital from the three banks, concentrate lending within BEM and reduce exposure elsewhere. This was only feasible as a result of the injection of capital received by four Moldova banks in the form of interbank deposits totaling MDL2.3 billion and further interbank deposits from Unibank (UB) and Banca Sociala (BS).
Kroll also says it is believed that of the MDL13.1 billion in loans issued by BEM to Provolirom SRL, Dracard SRL, Caritas Grup SRL and Voximar Grup SRL, MDL 6.5 billion was utilized to clear down existing Shor Group loan exposure in the name of other Shor Group companies at the three banks. How the balance of MDL 6.6 billion was utilized remains unclear. For unknown reasons, there appears to have been a conscious decision at the end of November to transfer exposure from BEM to BS. This culminated in the issuance of new loans between 25 and 26 November totaling MDL 13.7 billion to the Shor Group companies, Danmira SRL, Davema SRL, Caritas Group SRL, Contrade SRL şi Voximar Com, by BS. These funds were transferred to Latvian bank accounts, in the names of foreign entities incorporated in the UK and Hong Kong. During that period, the BEM loans in the name of Provolirom SRL, Dracard SRL, Caritas Group SRL and Voximar Group SRL were repaid.
The concurrent events surrounding the apparent deliberate destruction of loan documentation relating to companies involved in the scheme, along with the attempt to reverse the cession agreement with Roseau provides further indication that the loans were fraudulent, and part of a deliberate attempt to siphon funds from the banks.
The actual quantification of loss and tracing of funds is part of a broader exercise to be conducted in the future phase of investigation. It is however clear that at present BS is owed MDL 18.3 billion lei by Fortuna (MDL13.7 billion before accrued interest is applied). Even if these funds were used in parts to clear down MDL 13.1 billion loan exposure at BEM in the name of Provolirom SRL, Dracard SRL, Caritas Group SRL and Voximar Group SRL, those entities have only been identified as utilizing MDL 6.5 billion of funds loaned to them to clear down existing Shor Group loan exposure, leaving MDL 7.2 billion not accounted for. Further losses have been incurred in relation to outstanding interbank deposits held by Moldovan banks at BEM at the time of collapse.
The Kroll report was made public in English by Head of Parliament Andrian Candu. No official translation of the document was presented.
