Slovene Criminal Police Apparently Act on Whistleblowing Complaint Filed by VZMD and Conduct Searches of Slovenia's Central Bank

Kristjan Verbic at the meeting of the Commission for Public Finance Control

Mario Draghi Dismayed at the Seizure of Allegedly Confidential European Central Bank Information Stored on the Bank of Slovenia's IT Network

​In apparent response to a whistleblowing complaint filed by the PanSlovenian Investors’ & Shareholders’ Association (VZMD) on March 6, 2015, Slovenian criminal police conducted a pre-criminal investigation of Slovenia’s central bank, the Bank of Slovenia, and Slovenia's largest  bank, Nova Ljubljanska banka d.d (NLB), along with the banks' advisors, Ernest & Young and Deloitte, on Wednesday.  Approximately 40 criminal police collected evidence regarding possible wrongdoing of the banks as part of the December 2013  bank bail-in in which all the shareholders and subordinated bondholders, including retail investors, were entirely wiped out in six Slovenian banks.

VZMD's whistleblowing complaint against the Governor and Vice Governors of the Bank of Slovenia alleged criminal offenses of abuse of office or official duties, which under Slovenian law are considered crimes and carry a sentence of between one to eight years in prison. 

"I feel relieved, if not vindicated," VZMD's president, Mr. Kristjan Verbic, said.  "Filing a whistleblowing complaint in Slovenia, unlike the United States, is fraught with risk.  There is no upside.  If the Special Prosecutor's Office determined that my complaint was false, they could have come after me instead!  Moreover, I receive no payout if my allegations are proven true." 

VZMD filed another whistleblowing claim,  a notification of a suspicion of a criminal act by NLB, and all five members of its management board with the Special Prosecutor's Office, on August 13th 2014.  In the claim, VZMD alleged that at least one criminal act had clearly been committed by NLB’s management board. Specifically, on September 30th 2013, NLB’s balance sheet officially indicated a positive capital in the amount of EUR 835 million, but, in disregard of that figure,  the Bank of Slovenia posted a contradictory negative equity in the amount of (minus) EUR 318 million on the same day and used this figure as justification to cancel all NLB’s debt held in the form of shares or subordinated bonds.

Perhaps failing to take into account recent events such as Brexit and the massive demonstrations in Slovenia against management and organization changes that might ultimately lead to foreign ownership or a hostile takeover of its only port, the Head of the European Central Bank (ECB), Mario Draghi, has threatened to take legal action over what he says was an illegal seizure of ECB's information during the criminal investigation of the Bank of Slovenia, yet another indication of the value of the information seized by the Slovene criminal police in the searches.

In addition to filing whistleblowing claims, VZMD has filed claims in Slovenia's constitutional court, one of which has gone up to the Court of Justice of the European Union (CJEU).  The final decision in the CJEU case is expected this month.

The PanSlovenian Investors’ & Shareholders’ Association (VZMD) http://www.vzmd.si/, was founded to protect the rights of minority shareholders and retail investors and is led by its President Mr. Kristjan Verbič (Verbic@vzmd.si). Mr. Verbič is on the Board of The European Federation of Investors and Financial Services Users, http://www.betterfinance.eu/, a member of the Corporate Finance Standing Committee of the European Securities and Markets Authority and a member of World Federation of Investors.

Source: PanSlovenian Investors' & Shareholders' Association (VZMD)

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