Financial regulator orders dismissal of Eurasian Bank CEO

business and economy

Financial regulator orders dismissal of Eurasian Bank CEO

By SRI ⋅ July 6, 2009 ⋅

(SRI) - Kazakhstan’s Financial Supervision Agency (FSA) ordered the dismissal of Eurasian Bank’s chief executive Zhomart Yertayev and deputy chief executive Alexey Ageyev in connection with their activities as former top managers of Alliance Bank.

According to FSA’s statement published on its website, the two executives have been “relieved of their duties” at the Eurasian Bank as a result of “newly uncovered evidence of significant violations of the banking legislation, including providing false [financial] statements” during their tenure at Alliance.

More specifically, the FSA said the financial statements during their tenure did not reflect a number of deals between Alliance and unnamed offshore entities.

Alliance said in May its auditors discovered unrecorded guarantees of $1.1 billion worth of U.S. Treasuries to two major Russian banks as collateral for loans obtained by unnamed offshore companies. The borrowers then failed to pay back funds and the Russian lenders claimed the securities. The transactions were neither recorded on the bank’s books nor properly approved

The FSA said in its statement that the dismissal is not connected to the two executives’ activites at the helm of Eurasian Bank. However, recently the FSA warned Kazakh banks against offering excessively high rates on deposits saying they created new risks, without naming any specific institutions. Eurasian Bank has been one of the most aggressive players in the market for customer deposits, almost doubling its deposit in 2008.