The “scandal” and the truth:

At the end of 2014, three Moldovan banks: Banca de Economii (BEM), Unibank and Banca Socială, collapsed amidst allegations of “theft of US$ 1 billion” from the Moldovan banking system which is equivalent to around 12.5% of Moldova’s GDP.

The National Bank of Moldova (NBM) commissioned US headquartered business intelligence consultancy firm Kroll to apparently conduct an investigation into the circumstances resulting in the bank collapses. The Kroll report dated 2 April 2015 stated that from 17 August 2012 to 30 November 2014, the three banks had undergone significant shareholder change. Thereafter, each of the banks entered into a series of transactions which on the whole had no sound economic rationale and ultimately resulted in such a significant deterioration of the banks’ balance sheets that they were no longer viable.

The Kroll report stated that there appeared to have been a co-ordinated effort within the banks to deliberately disguise the true nature of the transactions and their beneficiaries. Kroll named Ilan Shor as having played an integral role in co-ordinating this activity, suggesting he was one of, if not the only beneficiary. In coming to these conclusions, Kroll admitted that it relied on information and analysis conducted by NBM which had not been independently verified by Kroll.

Ilan Shor is a young businessman, well-known public figure and philanthropist in Moldova. Ilan Shor has resolutely denied that the bank collapses were caused by his activities or that he benefited from the transactions which caused the bank collapses.

Following numerous business successes, he became Chairman of the Board of BEM in May 2014. At the time the government was led by Prime Minister Vlad Filat who had required Mr Shor to take this role. On taking over his duties of Chairman of the board, Ilan Shor was aware that state authorities were already informed in 2012-2013 (and before) that the largest state bank, Banca de Economii, was on the brink of bankruptcy due to a series of dubious loans made over the 10 years of previous administrations. The fact that the bank had troubles was also raised by a special Parliamentary Commission in 2013 and in an IMF report in 2012.

At the end of 2014, the three banks went into special administration. As a result, Mr Shor suffered severe financial losses and lost a major business project.

When a criminal case was opened in 2015, Mr Shor presented himself voluntarily to the authorities offering active cooperation with the investigation in order to find the true beneficiaries of this fraud. He presented the information and material that he had available to shine a light on the circumstances that led to the bank’s bankruptcy. As a result of Ilan Shor’s testimony, the authorities were able to build evidence and allegations of corruption against a number of public officials who were arrested and eventually convicted. Amongst them was the former Prime Minister Vlad Filat who is now serving a 9-year sentence for corruption, as reported by Reuters. Moldovan authorities have also sentenced Veaceslav Platon, a businessman linked to major money laundering networks (Laundromat Scandal) to a term of 18 years, from April 2017, as reported by Interfax.

Despite his decision to complete this civic duty through his active cooperation with the authorities, Mr Shor was put under arrest. First he spent 2,5 months in the cell of the investigatory isolator and then he was transferred to house arrest where he stayed until 21 June 2017. Mr Shor has complied with the terms of his house arrest and has done everything in his power to cooperate with requests from the prosecutor in charge of the case and its investigation in order to expose the truth and bring to justice the real beneficiaries of this systematic banking fraud.

As of today, the investigation continues and much of the truth is largely still unknown in the public domain while names of the true beneficiaries are yet to be disclosed.

Kroll is still retained by the NBM and provides updates to the leadership of the bank.

Some Members of the European Parliament have already raised questions of whether Ilan Shor is being treated as a scapegoat to prevent further investigation into the truth of the story.