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Owners criticize ECB move to close Latvia's PNB Banka

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Owners criticize ECB move to close Latvia's PNB Banka

The new and former owners of Latvia-based AS PNB Banka criticized the European Central Bank's move to wind up the lender, calling it hasty and unexpected.

The ECB and Single Resolution Board's decision to shut the lender comes less than two months after its owner Grigory Guselnikov agreed to sell the bank to a group of investors willing to recapitalize the lender. PNB Banka has been in breach of capital requirements since 2017, and operated under the direct supervision of the ECB at the request of Latvia's Financial Capital and Markets Commission.

Guselnikov told Reuters that the new owners were not given enough time by the ECB to complete the ownership changes and bolster PNB Banka's capital, also adding that the regulator's decision was driven by his 2018 bribery accusations made against Latvian central bank governor and ECB's governing council member Ilmars Rimsevics.

Middle Eastern investor Roger Tamraz, who is one of PNB Banka's new owners, also told Reuters the investors only asked for 90 days to complete the sale procedure and take over the lender from Guselnikov.

An ECB representative dismissed the owners' accusations, noting that the regulator "acted in strict accordance with the rules," when making its decisions regarding PNB Banka, the newswire reported Aug. 16.

Meanwhile, the new owners also said Aug. 18 that the lender was solvent and that they were ready to inject €146 million into it. The investors also challenged the legal grounds on which the ECB and the Single Resolution Board decided to liquidate the Latvian bank under national law and vowed to "vigorously contest any petition for the opening of insolvency proceedings in front of the Latvian courts."