The Board of Eesti Pank on its yesterday's
meeting decided to initiate bankruptcy proceeding against
EVEA Pank.
The decision on initiating bankruptcy proceeding was based
on the following factors. EVEA Pank has not been able to
satisfy a legitimate claim of its customer. It was
established by Eesti Pank that EVEA Pank does not meet the
prudential ratios. Equity capital of EVEA Pank is less than
the required ECU 5 million established by Article 37 Par. 4
of the Law on Credit Institutions. In addition, EVEA Pank
does not meet the capital adequacy ratio nor the established
reserve requirement.
It is evident that the financial situation of the bank
does not enable to fully satisfy the claims of all creditors.
It can be concluded from the information on the financial
situation of EVEA Pank that the bank has incurred permanent
difficulties in meeting the obligations towards its creditors
and the bank lacks the necessary means and reserves to
fulfill these obligations. Thus the bank is insolvent.
The depositors of EVEA Pank will be protected by the
principles of the Deposit Insurance Fund Act. According to
the Act, a determined circle of depositors, i.e. single
individuals, small and medium size businesses, is subject to
compensation up to EEK 20 thousand, but not more than 90% of
the deposited amount. The pay-out of the guaranteed deposits
will be started after 30 days at the latest trough other
credit institutions. The depositors will be informed of the
precise deposit compensation procedure by the Deposit
Insurance Fund.
According to the Law on Credit Institutions, the
initiation of bankruptcy proceeding means that the license of
EVEA Pank is withdrawn from Friday, 2 October 1998 and the
bank is subject to liquidation through bankruptcy proceeding.
The Board of Eesti Pank made its decision based on Article
9 Clause 3 of the Law of the Central Bank and Article 77 Par.
1 and 4, Article 79, Article 80 Par. 1 Clause 3 and Article
81 Par. 1 and 2 of the Law on Credit Institutions. The
decision on the initiation of bankruptcy proceeding, the
necessary data, documents and explanations will be submitted
by Eesti Pank to Tallinn City Court.
Due to the withdrawal of the license and initiation of
bankruptcy proceeding against EVEA Pank, the activities of
the bank as a credit institution and, as a result, the
execution of transactions listed in Article 5 of the Law on
Credit Institutions, are forbidden. After the publication of
bankruptcy notice, persons at whose disposal there are assets
of EVEA Pank are forbidden to carry out any transactions with
them.
