Dark secret of the Bank of Estonia

17.01.2013, 11:32

Now that the findings of the audit made by the Estonian central bank about the VEB Fund prove that the bank forged documentation, the key question is who prepared the document which was used to take money out of Vneshekonombank.

The bank’s then deputy governor Vahur Kraft yesterday denied any wrongdoing although he had signed the document in question in 1995.

Kraft who now runs Nordea Bank in Estonia said that he had signed many documents while in teh central bank, but never deliberately falsified documents.

Ardo Hansson, current governor of Bank of Estonia, apologized yesterday on behalf of the central bank, and said that while the letter was created in the bank, no harm to the state was done.

The bank’s internal probe showed that in 1995, the Bank of Estonia deliberately had prepared a document falsely stating that a Russian company named TSL International had $32 million worth of claims against Vneshekonombank, while its actual claim was several times lower.

Internal auditors said they were unable to determine who was to blame for preparing the letter which appeared to be part of an orchestrated effort to recover funds frozen in VEB.

Former Minister of Finance and former member of the supervisory board of VEB Fund Mart Opmann, added that he was interested if the money was actually paid out by Vneshekonombank and what happened to it.

The auditors’ report has forced the Estonian Prime Minister Andrus Ansip to eat his words because three months ago Ansip told an Äripäev journalist after the government press conference that the paper’s claim that there were skeletons in the cupboard of former central bank and VEB Fund executives were untrue.
Ansip said that he is ready to take poison that the central bank has forged nothing.
The country’s leaders are now mounting a counter-attack, claiming that what happened was not forging.

Ardo Hansson said in comment that forging was a legal term and what happened was falsification of data. Also Jaan Männik, chairman of the central bank’s supervisory board, believes that there was nothing criminal in what the central bank did.

Former Bank of Estonia governor Andres Lipstok said in comment that since the central bank is in the business of trust, the reports that the bank’s top executives are suspected of having falsified data is eroding the bank’s credibility.

 „During my time, no deliberate falsification had taken place. Any activities that erode confidence are bad for the central bank,” he said.
Lipstok added that Bank of Estonia’s auditors must now find out why such falsified data was presented.

Auditors determined that:
- The letter that falsified the claim of TSL International to Vneshekonombank was created in the Bank of Estonia
- It is not known who created the letter
- No theft of state property took place
- Based on the documents available, it was possible to restore the chain of transactions
- While all transactions have been tracked, often it remains unclear why it was necessary to do them
- Those involved in these activities say they don’t remember because all happened 15 to 20 years ago