(Bloomberg) -- A Latvian court declared the country’s sixth-biggest lender insolvent, sealing the demise of the last bank to level accusations in a high-level corruption scandal.
The decision, which Latvia’s Financial and Capital Market Commission said was taken on Thursday, comes almost a month after AS PNB Banka became one of only a handful of lenders declared by the European Central Bank to be “failing or likely to fail” because of insufficient capital. It joins Banco Popular Espanol SA, Banca Popolare di Vicenza SpA, Veneto Banca SpA and ABLV Bank AS.
The Baltic country has been remaking its financial system since its No. 3 lender was closed in 2018 following U.S. money-laundering allegations. PNB was one of three lenders to publicly accuse or submit evidence against central bank Governor Ilmars Rimsevics in a bribery case.
Initially suspended, he resumed his duties as a member of the European Central Bank’s Governing Council in March, though still faces trial in his homeland. Rimsevics denies wrongdoing, blaming a group of commercial banks for his legal troubles.
With former PNB owner Grigory Guselnikov also in a legal battle with the government, Latvia handed direct regulation of the bank to the ECB in April.
He announced the sale of a majority stake in June to a group of investors, with the ECB soon calling on PNB to boost its capital. In August, the ECB conducted an on-site inspection and found elements “indicating that the assets of the bank were less than its liabilities.”
PNB had submitted evidence in a bid to show it was solvent, while its shareholders said they were ready to inject 146 million euros ($160 million).
The lender had assets of 550 million euros and about 100,000 clients in Latvia, according to its website.
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