VIENNA: Raiffeisen Bank International Chief Executive Herbert Stepic resigned yesterday in what he called an effort to spare his bank from negative publicity over personal property deals that triggered scrutiny by the lender and regulators.
Stepic, 66, again denied wrongdoing in using front companies in the Caribbean and Asia to buy flats in Singapore in 2006 and 2008 - deals exposed by the Offshore Leaks investigative journalism project — but said he decided to quit out of loyalty to Raiffeisen.
“Given the media reports, I soon became aware that, despite the facts, a debate was taking place that threatened to do massive harm to my company,” a drawn-looking Stepic told a news conference packed with journalists and television cameras.
RBI’s supervisory board has still to accept Stepic’s resignation, but his fate seems sealed, and officials said a formal decision was due within days.
Top members of the board issued a statement calling Stepic’s action “a sign of great loyalty to the company. It is great credit to him that he shows with this difficult decision willingness to avert reputational damage.”
Stepic says he did not need to notify his bank or regulators about three apartments in Singapore he bought via “project companies” set up with the help of Swiss bank UBS in the British Virgin Islands and Hong Kong.
Those deals are now under investigation by Austria’s central bank, its Financial Market Authority (FMA) watchdog and Raiffeisen itself, which has said it will check if his action violated the law or internal guidelines.
Stepic’s abrupt fall from grace removes a larger-than-life figure who made Raiffeisen into central and eastern Europe’s second-biggest lender, with 60,000 staff in 17 countries.
“As I see it, these affairs were in his private sphere, but we have different sensibilities about these things from what we had 10 or 15 years ago,” said Wilhlem Rasinger, president of the Austrian Shareholders’ Association.
Shares in Raiffeisen fell as much as 3.6 percent on the news before paring losses to trade down 1.9 percent at ¤26.49 by 1114 GMT.
Nearly 80 percent of the bank is held by Raiffeisen Zentralbank, itself controlled by hundreds of private cooperative banks in Austria.
Guenter Hohberger, central and eastern Europe banks analyst at Erste Group, said Stepic would be hard to replace. “I don’t believe the bank will abandon its strategy - the central and eastern Europe business is its fundamental business,” he said.
Reuters
