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Hundreds of millions of Euros have gone from our banks to tax havens, Minister of Public Finance Ionuţ Mişa states, in an interview with a financial newspaper. The official thus confirms what BURSA has reported as early back as the beginning of March.
The article published in March by BURSA caused major reactions in the system, as some bankers were extremely upset over the statements made by our sources. Now, the Minister of Public Finances confirms the statements made by BURSA, through the statements made publicly, which means that bankers who denied our article were mistaken.
Ionuţ Mişa said, according to the aforementioned publication: "We have three major probes under way with banks. We have told the people of the Romanian Banking Association the same thing: it is impossible to pay no profit taxes for ten years in a row. We monitor the payment statements monthly. Some amended tax returns have begun appearing. That means that banking institutions are starting to stop the selling of loans abroad without justification of their own accord. We have capped the deductibility at 30%, for banks as well as for other companies that sell receivables. It is only in one bank that we have established an additional profit, which should have been paid to the state over the last five years, amounting to 650 million lei. In that particular case there is also a criminal complaint involved. There have been some successive transactions to sell/buy receivables, by which some of the assets, worth hundreds of millions of Euros, went to tax havens.
You have to realize that each of these transactions involving receivables also has collaterals behind it. For instance, there was a bank which sold abroad a receivable with a face value of 14 million Euros for 1 Euro, and the buyer told the Romanian company and simply told them: < < unless you accept me as a shareholder, I will demand the liquidation of the company > >. Just think that there are state owned companies that can end up in that situation when they borrow from foreign banks in Romania. Using that mechanism, they can be acquired for nothing. It can even be considered a matter of national security".
In the article of March 7th, 2017 called "Sources: «Romanian banks - a vehicle by which multinationals take money out of the country»", BURSA wrote, quoting official, reliable sources, that Romanian banks do not pay taxes unless they want to, as they have a very complex profit reporting system.
Banks are using special legislative provisions and the ones dedicated to the banking sector to avoid paying the profit tax, the quoted sources said, mentioning the unlimited deductibility of expenses with the sale of non-performing loans (NPL).
Financial institutions sell non-performing loans within the group, (to a company in which the bank is a shareholder), to an offshore or to a company in which a former manager of the bank is a shareholder, the quoted sources told us: "The bank sells 100 million Euros worth of loans to an offshore, for a price of 7 million, with the recovery ratio being 35-40%, and the offshore in question concludes a contract with the bank to continue collecting the payments, paying it a commission of 1.8%. Under these circumstances, the profit of 28 million Euros (35 millions recovered less the 7 paid upon purchase) goes to other countries, doesn't stay here.
In Romania, hostile corporate takeovers take place, our sources further told us, who explained: "I have a concrete case to give you - a Romanian company borrowed from a bank. The 14 million Euros loan became non-performing, and the bank sold it, together with the guaranteed assets, for 1 Euro, to a foreign company. The latter turned against the Romanian company to collect its receivable. To avoid foreclosing on the assets and causing the company to go bankrupt, and because the company didn't have cash, the company converted the receivable to stock, taking over a 33% stake in the company, for 2.1 million lei. Thus for one Euro, the foreign company acquired over the 2.1 million lei controlling stake in the Romanian company, in a hostile manner, as the buyer of the receivable thus took over the management of the company, which was listed on the stock exchange.
The competent institutions should investigate whether banks together with foreign companies have a hostile takeover of Romanian companies. It is a matter of national security, which secret services should be involved in as well.
In Romania, 95% of the banking system is privately owned, which means that whenever they want, banks can stop the funding of the Romanian economy, the quoted sources warn.
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