PRESS RELEASE 8 JUNE 1998

THE BOARD OF EESTI PANK PARTIALLY SUSPENDED THE LICENCE OF EESTI MAAPANK

On its meeting today, the Board of Eesti Pank partially suspended the licence issued to Eesti Maapank in order to equally guarantee the interests of the creditors and depositors of the bank. From Monday, 8 June, Eesti Maapank is permitted to carry out only those transactions and operations listed in Article 5, Clause 1, Subclauses 9 and 11 of Credit Institutions Act, i.e. Eesti Maapank is allowed to advise customers and carry out depository transactions. The Board of Eesti Pank proceeded from the need to avoid possible conflict of interest and partiality to the interests of some creditor, depositor, shareholder, employee or managers of the bank up to the moment the decisions of the general meeting of the shareholders of Eesti Maapank take effect. The shareholders general meeting, which will take place on 18 June 1998, has been convened to decide the termination of Eesti Maapank. The decision of the general meeting has to be approved by Eesti Pank on the condition that the assets of Eesti Maapank are sufficient to cover the justified claims of all creditors.

The Board of Eesti Pank, when making the decision, took into consideration the application submitted by Eesti Maapank to restrict the extent of its licence and the fact that the level of Eesti Maapank's own funds and reserves does not offer adequate support to its financial and economic situation.

According to the Board of Eesti Pank Decision, the Regulations of Eesti Pank will suspend all the following transactions and operations of Eesti Maapank up to the moment the liquidation decision of Eesti Maapank comes into force:

  granting and/or paying out any credits;
  international settlements;
  taking on and/or meeting any liabilities in any form either directly or indirectly;
  any payments, including payments to shareholders, managers and employees of the bank or any other persons;
  all transactions listed in Article 5 of the Credit Institutions Act excluding Subclauses 9 and 11 of Clause 1.

From Monday, Eesti Pank will organize on-site supervision of Eesti Maapank based on Article 60 of Credit Institutions Act in order to guarantee undeviating compliance with the Board of Eesti Pank Decision and restrictions.

The regulations of Eesti Pank mentioned here have been transmitted to Eesti Maapank and accepted by the recipient.

Eesti Pank and the Government will actively continue to consider possible means to solve the problems of Eesti Maapank in the best possible way for the depositors and creditors.