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A referendum will be held in Bălți, regarding the dismissal of Mayor Renato Usatîi

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3 January 2018- Bălți municipal councilors voted to initiate the local referendum on the dismissal of Mayor Renato Usatîi, who is currently in the Russian Federation and is subject to an international warrant. The decision was taken by 27 municipal councilors from Bălți. The date of the referendum is to be determined by the CEC.

In order for the plebiscite to be valid, it is necessary for Usatii’s revocation to be voted by at least as many people as the amount that voted for him, plus one vote. Renato Usatii was elected from the first round by 72% of the voters.

Mayor of Balti is not in Moldova for more than a year, and meetings of the City Hall officials are often conducted with Usatîi’s presence via Skype.

Politics

Supporters of Moldova-Romania Union begin Centenary Year with display of 100m flag over Prut

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Source: news.ro

31 December 2017- A 100 meters long tricolor linked the two banks of Prut river, marking the beginning of the Centenary Year of the Great Union of Romania in 1918.

The celebration, attended by several hundreds of people, was organized by the “Alliance for the Centenary” that reunites over 130 civic organizations that support the Union of Moldova and Romania, but also the Fălciu village administration. The flag was suspended next to the rarely-used railway bridge that connects Făcliu from Romania and Cantemir from Moldova, reports News.ro.

Source: news.ro

Source: news.ro

2018 will be marked by the 100 anniversary of the Great Union of Romania. Following the disintegration of the Austro-Hungarian and Russian Empires in 1917 and 1918, the Romanian historical provinces of Basarabia (territory between Prut and Nistru rivers), Bucovina and Transilvania united with the Kingdom of Romania.

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Politics

President Igor Dodon suspended by Constitutional Court for refusing approval of seven ministers

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Source: Radio Free Europe

2 January 2018- The Constitutional Court of Moldova suspended President Igor Dodon and instituted the interim Presidency for appointing the rejected 7 new ministers. The decision follows a complaint of a group of MPs.

According to the High Court, the decision to suspend Dodon is caused by his deliberate refusal to execute his constitutional obligations, such as appointing ministers upon the request of the Prime-Minister. In addition, the Court allowed the Parliament speaker or the Prime-Minister to sign the decrees on appointing the 7 new Ministers proposed by the Democrats, including one Deputy Prime-Minister for European Integration.

As a response, Dodon called the decision of the Court “shameful” and the Court itself “a hostage of its own uninspired decisions”. The suspended President accuses the judges to “play the game as the Democrat government dictates them”. In addition, he claims the legal procedures were seriously violated because the Court was complained to by a group of deputies, and not by the Government or the Parliament as a whole:

“These ministers enter the Government through the backdoor lacking the needed legitimacy and credibility”, says Dodon in a Facebook statement.

According to the Moldovan Constitution, a President can reject a law or a decree from the Government only once with a motivation.

In October 2017, the Court ruled that Dodon could not exercise his rights after vetoing the appointing of the Defense Minister Eugen Sturza. Thus, the Parliament speaker Andrian Candu, as an interim President for some hours, could appoint Sturza.

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Economy

Kroll 2 report: Summary and Reactions

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On 21 December 2017, the National Bank of Moldova published the summary of the investigation report made by Kroll and Steptoe&Johnson. The report, otherwise called “2nd Kroll report”, completes the 1st Kroll report on the loan exposure of the Three Moldovan banks (BEM, BS, Unibank) that were defrauded in 2012-2014.

The 2nd Report comes with a more detailed scheme of how the leading “Shor group” defrauded Banca de Economii, Banca Socială, and Unibank by directly participating in the administrative councils of these banks and by falsifying reports on bank liquidities. Moreover, Kroll revealed several laundering mechanisms that were used to channel the funds from the three banks to the destination accounts. Even if it mentions the name of Ilan Shor as one of the facilitators and beneficiaries of the banking frauds, the summary does not provide any other names in order not to impede the ongoing investigation and prosecution in some cases.

What 2nd Kroll report says

  • Control over the Moldovan banks, and not only the Three failed ones, was constantly the aim of several interest groups. Several shareholders took advantage of the poor evaluation of banks’ shares and some could acquire small portions of shares through proxies. In the case of the Three Banks, the so-called “Shor group” could take control by buying shares on the behalf of off-shore companies, thus hiding the origin of the funds;
  • The administration councils at the Three Moldovan Banks were acting in coordination, involving conflicts of interests and integrity lack in the bank governance process. At Banca de Economii, where the Moldovan Government was the main shareholder, the Government delegates were periodically not invited to the meeting of the administration council;
  • What Kroll continues to say in its 2nd report is that Ilan Shor and around 77 companies in his entourage are known to be the beneficiaries of the fraudulent loans given between 2011 and 2012:

    Source: bnm.md

  • The liquidity level at the Three Banks was maintained at acceptable levels with the help of resources coming from pensions and social security funds operated by the respective banks, with the help of loans given by the National Bank guaranteed by the Moldovan Government, but also with the help of fake deposits in Russian banks;
  • The summary shows that most of the defrauded funds were channeled through Latvian banks (otherwise called “Core Laundering Mechanism”) for mostly British off-shore companies.

    Source: bnm.md/ Kroll

    The Core Laundering Mechanism based in Latvia was either used for paying the loans back or to send the funds in different bank accounts in multiple jurisdictions such as Cyprus, China, Russia, Switzerland, USA or Hong Kong. Some banks in Moldova and Estonia were also used to launder money and disguise their origin.

    Source: bnm.md/ Kroll;

  • Since some of the loans, worth approximately 2 billion USD, were channeled back to the origin banks to create a good credit score, the net loss of the Three Banks between 2012 and 26 November 2014 is estimated at 600 million USD;
    Source: bnm.md/ Kroll
  • So far, the traces of only 50 million USD out of the total sum could be totally discovered;
  • Kroll and Steptoe&Johnson are planning to present a more detailed investigation in 2018 in Moldova;

Reactions

  • According to Expert-Grup, the 2nd Kroll report did not fully explain the role of the state guarantees issued in November 2014, but also the actions conducted by the Moldovan Government regarding the reimbursement for the clients of the Three Moldovan Banks. Moreover, multiple NGOs called on the Moldovan Government to abandon the initiative to decriminalize several economic crimes, including banking frauds, an action would impede the prosecution of those involved in the “Moldovan Grand Theft” and encourage new frauds in the area;
  • Ilan Shor, the main figure in the “Grand Theft”, announced that his lawyers filed in court against Kroll for defamation, conspiracy to injure by unlawful means and wrongful interference with his economic interests. According to Shor, the reports issued by Kroll do not reveal the real beneficiaries of the frauds;
  • Pavel Filip, Prime-Minister of Moldova: “If we had to publish all the names that are found in this report, I assure that 90% of the names are absolutely honest people, but that were simply part of this circle. These names cannot be made public”, claimed Moldova’s PM, promising that all the responsible persons would be prosecuted;
  • Maia Sandu, PAS leader, ex-Minister of Education in 2014, did not seem surprised that Kroll pointed out to Shor’s primary role in the banking frauds, but rather asked his case is slowed down by the Prosecution’s Office. Her party organized a flashmob asking for the restart of Shor’s case. In addition, Sandu stated that current Parliament speaker, Andrian Candu, was the main promoter of the state guarantees for the loans of the National Bank to the failing banks;
  • Andrian Candu, speaker of the Parliament and Economy Minister in 2014, is waiting for the Kroll experts to come in January 2018 in Moldova to coordinate the investigation of the banking frauds;
  • Iurie Leancă, PM in 2014, now appointed Deputy PM, says that he is the most interested in the results of the Kroll investigation, but rejects claims his Government rushed into offering the huge guarantees for BNM loans.

The reaction of the Moldovan people to this 2nd Kroll report is that of confusion: nothing much new was revealed and the main figure of the “Grand Theft” is only under judiciary control in a delayed case.

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