Central bank appoints temporary administrator in Promdei banka

Published: 30/7/1999

At the 141st meeting held on July 30, 1999, the Council of the Croatian National Bank decided to appoint a temporary administrator to Promdei banka d.d. Zagreb. This decision was reached by the CNB Council, after the CNB experts (based on the analysis of Promdei banka financial statements, the CNB on-site examination findings, and the urgent request for help made by Promdei banka itself) established that the bank has operating difficulties and is incapable of conducting payments.

The tragic death of Mr Ibrahim Dedic, the ex-president of the management board of Promdei banka, and the only person authorized to represent the bank on an individual and independent basis, led to a crisis in the management board that resulted in the substantial operating difficulties of the bank. On July 22, 1999, the Croatian National Bank ordered Promdei banka to appoint a temporary deputy for the member of the management board within the time period of 30 days. During the on-site examination of Promdei banka operations (conducted in the meantime), it has been established that the absence of the management board has made the bank unable to conduct its regular operations, as well as that the bank refuses and is incapable of fulfilling its obligations. Therefore, the CNB once again requested the appointment of a temporary deputy for the member of the management board on July 28, 1999, and set the time period of 24 hours as the deadline for his appointment. Although one of the supervisory board members was appointed the deputy for the member of the management board within the set time period, it has been established that the crisis in the management board of Promdei banka still exists.

The Council of the Croatian National Bank also established that Promdei banka can not continue to conduct its operations without the presence of the adequate management board and, having in mind the protection of the banking system as a whole, it appointed the temporary administrator to the bank pursuant to the CNB Council's authority determined by the Banking Law. The temporary administrator is taking over all the authorities of the management board, the supervisory board and the assembly, and his main task is the management of the bank aimed to protect the interests of depositors and other creditors.

The temporary administrator is appointed for a period of 6 months with the obligation to submit to the CNB Council within 45 days, a written report on the condition of the bank and on the possibilities for the bank's profitable operating in the future. Mr Ivica Maloca will assume the duty of the temporary administrator at Promdei banka.