MEDIA STATEMENT
01/02/2019
With regard to the filing of criminal charges by Atlas Group against the Governor of the Central Bank of Montenegro, Radoje Žugić, interim administrator in the Atlas Bank, Tanja Terić, former interim administrator in the IBM Bank, Milan Remiković, and other CBCG employees, we hereby issue the following
MEDIA STATEMENT
In the last on-site examinations of the Atlas Bank and IBM Bank, the CBCG determined that these banks were critically undercapitalised and that they applied illegal and unsound practices in their operations.
In accordance with the mandatory provision of the Banking Law and pursuant to the findings of the on-site examinations, the Central Bank of Montenegro introduced interim administration in the Atlas Bank and IBM Bank on 7 December 2018. After the introduction of the interim administration in the Bank, upon the proposal of the interim administrator, a moratorium was introduced. The introduction of the moratorium was an essential measure to protect the assets of the Bank in the conditions of substantially reduced liquidity. Thus, the decision on introducing the moratorium is a clear confirmation that the CBCG does not put the rescuing of one bank before the stability of the financial system as a whole.
In accordance with the best practices of rapid resolution of non-systemic banks, the interim administrators drew up reports on financial situation and operating conditions of both banks in a very short period. Unfortunately, with regard to the Invest Bank Montenegro, it was assessed that the continuance of its operations was not possible, and that its liabilities exceeded its assets. With regard to the Atlas Bank, it was assessed that the continuance of the operations of this bank was possible with recapitalisation in the amount of 22 million euros, cost rationalisation, and sustainable existing business model. The aforesaid was performed in an accurate and responsible manner providing consultation and confirmation of credible financial institutions and best practices.
All activities of the Central Bank are performed with a view to preserving the sound financial system. In this regard, one of the priorities of the Central Bank was to resolve the problems found in these two banks. It is undisputable that, in the previous period, the Central Bank acted in line with the law, imposing measures against these banks, and, in reference to the Atlas Bank, performing an ongoing monitoring of its operations.
Considering that, in his media appearances, the majority owner of the Atlas Group accuses the Central Bank for the damage caused by the introduction of interim administration and moratorium, i.e. introduction of the bankruptcy proceedings in the IBM, poses the question of who is to blame for poor operations of almost each member of the Atlas Group.
Mr Knežević’s megalomaniac ideas and destructive business decisions made in 2015 and implemented in 2018 resulted in a very complex situation in two banks in July 2018, risking the operations of the entire Atlas Group. Who, having any professional responsibility, would sign a 12.5 million worth guarantee (50% of the bank’s capital) amidst the CBCG’s strict measures imposed against Atlas Bank, without the approval or their own bank’s Board? Who would be so unprofessional as to fail to report this guarantee to the supervisor, and thereby disregard their obligation of daily reporting to the CBCG? Who, having any business responsibility, would continuously delay the possibility of selling a portion of acquired assets of the Bank to save it, despite the CBCG’s strongly urging them to do so? Who denied the buyer of the Invest Bank because the price was “insufficient”, regardless of being aware of the problems in the Bank? Who ignored each constructive initiative and coordination of the Central Bank, which he praised until yesterday?
None other than the major owner, since he obviously misjudged that the current management of the CBCG will not react in line with its mandate and the law.
The employees in his companies have not been receiving salaries for long time. It is generally known that companies A1 TV, Atlas Invest, Atlas Life, Atlas Penzija, DZU Atlasmont are operating with a loss, they do not have funds at their accounts and that majority of those accounts are frozen, as well as that they fail to meet obligations to the Government. The Atlas Bank has been paying for all those debts up to now.
Therefore, we are surprised with the ambition of Mr Knežević who, after he has obviously failed as major shareholder, owner and business decision maker, lost all integrity in the international areas where he operated, and revealed for his potential for illegal and unhallowed activities (to which he has been admitting continuously), and irresponsible relation towards his employees, now finds himself in a role of auditor of supreme monetary authority. The only thing that he had forgotten is that, for a long time now, there has been no one sitting in the CBCG who would address the owner of any of the commercial banks as “boss”. The only “boss” that the CBCG respects without any objection is its mandate, stability of the financial system as a whole, and its work strictly in accordance with the law.
The CBCG remains, as always, constructive, and it hereby gives a benevolent advice, as it has always done, to the majority owner of the Atlas Group that instead of wasting energy on unfounded criminal charges (trying to turn attention away from its actions that are under prosecutorial process) to concentrate, in this challenging moment, on closing the offer for recapitalisation of his last stronghold of the Atlas Group, the Atlas Bank. Because the truth is, the one on which we can jointly agree, that 21 February is the last day for bank recapitalisation by the existing shareholders.