Court confirmed unsuitability of Andrus Kluge for a management position in Krediidipank
Today, 6 November 2015, Tallinn District Court made a decision that confirmed the opinion of the Financial Supervision Authority that Andrus Kluge is not suitable to be a member of the management of Krediidipank due to a lacking business repute.
According to the judgement of the Circuit Court, the decision of 9 September 2013 of the Financial Supervision Authority remained in force. In the decision, the Financial Supervision Authority made AS Eesti Krediidipank a proposal to remove Andrus Kluge from the position of a member of the supervisory board because, due to his actions, he is not suitable to continue in a management position of a credit institution. The Circuit Court agreed with the judgement of 29 August 2014 of the court of first instance that the Financial Supervision Authority has correctly determined the unsuitability of Andrus Kluge to manage a credit bank.
“The decision of the Circuit Court made today confirms once more that dishonest people and people that disregard laws cannot be part of our financial sector. Every day, we work hard at the Financial Supervision Authority to keep unsuitable people away from the Estonian financial sector,” commented on the court decision Kilvar Kessler, Chairman of the Management Board at the Financial Supervision Authority.
Andrus Kluge has 30 days to file an appeal on the decision with the Circuit Court.
In 2011, Firmex Investeeringud OÜ, a company of Andrus Kluge, the former chairman of the management board and the current chairman of the supervisory board of Krediidipank, and Genovia Invest OÜ, a company that was at that time related to the management of Krediidipank, were added to the circle of shareholders of Eesti Krediidipank. According to law, a person that acquires a qualifying shareholding in a bank requires an approval of the Financial Supervision Authority. A qualifying shareholding is a shareholding that exceeds 10% of the share capital of a bank. When acquiring 15.7% of the shares of Krediidipank, Andrus Kluge as a physical person and the sole shareholder of Firmex Investeeringud OÜ disregarded the legal requirement to obtain an authorisation from the financial supervision authority before such transaction. Although soon after Andrus Kluge sold 7.2% of Krediidipank shares through his company to Genovia Invest, the said private limited companies acted together and had the same creditor. Firmex Investeeringud OÜ and Genovia Invest OÜ were given unsecured loans in millions of euros by private creditors and the arrangements were made with the assistance of Andrus Kluge. For the supervisory authority, the background of the creditor of these loans and the motives to give such loans is not entirely transparent and these actions create strong suspicion about the motives of such large loans. Arrangements concerning these loans were directly linked to Andrus Kluge at the time he managed Krediidipank.
In addition, according to the Credit Institutions Act, chairman of management board shall not be a member of management board of another business company. According to the register card, the member of management board of Firmex Investeeringud OÜ was Andrus Kluge’s spouse; however, the spouse had given full authority to make transactions in the name of the private limited company to Andrus Kluge. Andrus Kluge used this full authority very actively to make transactions with Moscow Bank, Genovia Invest OÜ, which belonged to other members of the management board of Krediidipank, and the mentioned questionable creditors.
Taking into account the above, the Financial Supervision Authority arrived at a conclusion on 9 September 2013 that Andrus Kluge does not have good business repute.
The Financial Supervision Authority acts to maintain financial stability and its task is to ensure the protection of clients’ interests. The situation in the management of Krediidipank arises the interest of the supervision authority also in persons and several minority shareholders that hold a significant shareholding in the credit institution or in the capability of these groups to contribute capital to or raise capital for the bank, if necessary.