FBME BANK SALE HALTED PENDING LEGAL DECISION

Procedures to sell FBME Bank have been halted pending a court decision on a motion for the suspension of a Central Bank (CBC) order placing the lender under resolution, it emerged on Friday.

A CBC statement said it had voluntarily accepted, as the resolution authority, not to sign any agreement or issue a new decree concerning the sale of the lender’s branch in Cyprus until the court ruled on an FBME application for an interim order suspending the July 21 order that placed it under resolution with the purpose of selling its operations to protect depositors.

The CBC stressed that FBME continued to be under its administration, which meant it was still within its rights to negotiate with potential buyers.

The decision is expected in the next week or so.

The Central Bank took control of FBME’s operations in Cyprus, following a report from the Financial Crimes Enforcement Network (FinCEN) of the US Treasury describing the bank as a “primary money laundering concern.”

The US Treasury accused FBME, which though chartered in Tanzania operates primarily in Cyprus, of facilitating financial activity for transnational organised crime and Hezbollah.

The lender denied the money laundering allegations, suggesting the CBC’s move had other motives.

FBME said that “given that the Central Bank of Cyprus action has occurred at a time when the bank maintains exceptionally high solvency ratios, it is natural for FBME to question whether the CBC current action is motivated by concern for its depositors, or by the financial requirements of the CBC itself and the institutions it supervises.”

“In the bank’s view, the CBC measure is a hostile takeover. FBME does not know who this action is intended to help but it is clear that it will not be to the benefit of FBME Bank, its depositors, its employees, or the Republics of Tanzania or Cyprus.”

Source: Cyprus Mail