Two years after the $1bn theft from Moldova’s banking system surfaced, sending the country’s three largest banks into bankruptcy and forcing the government to pay debts of over 10% of GDP, the state is mulling stepping in again in favour of some of the largest banks. 

Specifically, the ruling coalition is considering allowing the government to temporarily take over stakes confiscated from non-transparent shareholders in banks of systemic importance, before selling on the shares, according to Mold Street. The procedure raises questions and could open the door for more costs to be incurred by the state.

The bill is clearly aimed at tackling the situation at the country’s largest banks Moldova Agroindbank (MAIB) and Moldinconbank, where significant stakes, confiscated from non-transparent shareholders, have been for sale over the past year. Despite the central bank’s optimism that credible foreign investors would compete for the two stakes, no deal has been announced so far.

According to the bill drafted by parliament speaker Andrian Candu, the government would be allowed to buy the shares in the two banks of systemic importance. The purchase would have to be endorsed by the monetary authority. 

Under existing laws, if no buyer shows up, the shares are canceled and the capital of the bank is reduced. The authors of the bill claim, however, that this would not be advisable in the case of banks with systemic importance. In such cases, the state should be allowed to buy the stakes with the purpose of selling the shares later, they argue. However, it’s unclear how the state would be able to sell the shares, given no buyers have come forward during the year they have been on the market. 

In addition, loopholes in the bills could allow non-transparent shareholders in large banks to sell their stakes at a high price, at the expense of state.

The stakes in the two banks are rumoured to be indirectly controlled by the leader of the ruling coalition, Vlad Plahotniuc. 

The bill also specifies that the state would not sell the shares at a lower price than it paid for them, but it remains unclear what would happen if the state does not find a buyer ready to pay a higher price.

Shares in a third major Moldovan bank have been sold recently. However, Victoriabank, which is in the process of being taken over by Romania’s Banca Transilvania, is not among the banks whose shares were confiscated from non-transparent owners. At Victoriabank some shareholders with uncertain identity decided to sell their shares after receiving a preliminary notification from the monetary authority.