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Start Uncategorized Greensill Bank: Customers unable to access their money - BaFin orders moratorium

Greensill Bank: Customers unable to access their money – BaFin orders moratorium

Greensill Bank: Customers unable to access their money – BaFin orders moratorium

The Bundesanstalt f?r Finanzdienstleistungsaufischt (BaFin) – Germany“s Federal Financial Supervisory Authority – has closed down Greensill Bank“s business operations with its customers and filed criminal charges. Private investors as well as institutional investors and municipalities fear losing their money at the bank.

Greensill Bank was acquired by the British-Australian financial conglomerate Greensill Capital in 2014, with the parent company currently experiencing serious economic difficulties. According to media reports, an application for bankruptcy protection has already been submitted a few days ago in Australia and preparations are being made to file for insolvency in the UK, with the problems having now also reached Greensill Bank in Bremen.

Faced with the threat of over-indebtedness, the BaFin has closed down the bank“s business operations with its customers and ordered a moratorium. We at the commercial law firm MTR Rechtsanw?lte can report that the bank can no longer pay out money to customers and is only allowed to accept payments if they are intended for settling debts with the bank.

One of the key focuses of the bank was the financing of supply chains, though it also offered attractive investment conditions to private investors as well as institutional investors and municipalities. The accounts have now been frozen and customers are unable to access their money.

Also of concern is that a forensic special investigation conducted by the BaFin revealed accounting irregularities. According to the BaFin, the bank failed to produce evidence to support the existence of receivables on its balance sheet, leading the supervisory authority to file criminal charges with the Bremen public prosecutor“s office.

On a rare positive note, each customer“s deposits are protected up to a value of 100,000 euros under the terms of the German Deposit Guarantee Act (Einlagensicherungsgesetz, EinSiG). Compensation will not be forthcoming, however, until the BaFin has determined that it is payable, which has not happened to date.

There is also the possibility of further payments under the deposit protection fund (Einlagensicherungsfonds) of the Association of German Banks (Bundesverband Deutscher Banken), though these would primarily benefit private investors, potentially leaving institutional investors and municipalities empty handed.

Accounting irregularities and criminal charges notwithstanding, customers and investors of Greensill Bank should waste no time in examining and exhausting every legal avenue available to them in order to protect themselves from the threat of financial losses.

https://www.mtrlegal.com/en/legal-advice/banking-law.html

Keywords:Lawyer, Lawyers, Attorney

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