Spaudos centras
Spaudos centras
Press Release
Vilnius, September 16, 2013
Picket near the Norwegian embassy in Vilnius against the actions of AB DNB bankas in Lithuania
On September 16th at 3 pm consumer rights association “For Honest Banking” is organizing the picket of up to 15 people in front of the Norwegian embassy in Vilnius aimed to express protest against the rapacious and legitimately questionable actions of the AB DNB bankas of the Norwegian capital. Specific behaviour of the bank in Lithuania is primarily targeted against a big group of Lithuanian citizens.
Throughout 2007-2008, over 600 Lithuanian families acquired stock market indices linked bonds (henceforth: bonds) issued by AB DNB bankas using funds loaned to them for this purpose only by the same bank which applied significant financial leverage (up to 3-5 times). This product was broadly marketed as a reliable and an extremely safe one, therefore the clients of the bank carried out huge losses, estimated to reach approximately 100 000 000 Litas (about 228 mio. NOK).
After few years the bank claimed the property of the clients. Such an action stipulated sound and solid investigation of this financial product in 2011 carried by the Securities Commission of the Republic of Lithuania (currently integral part of the Bank Supervision Department of the Bank of Lithuania). The investigation resulted with a finding that DNB bank has made offences while shaping and circulating these bonds. The Supreme Administrative Court also judged this case and issued the ruling that the bank has violated the law. Despite the above mentioned, AB DNB bankas is taking its clients to the courts with an ultimate objective to still get profit from the product which was straight forwardly described as a negative by two national state institutions of the Republic of Lithuania.
Such a product, i.e. bond of the AB DNB bankas, was also analysed by Dr Arvydas Paskevicius, financial expert and professor at International Business School of Vilnius University. In his study Professor concluded that such a complex synthetic investment product was by nature “toxic” and unsuitable for non-professional investors.
“I had a deposit account with AB DNB bankas, and the officer of the bank persuaded me to change it to the bonds which shall be not only safe but also more profitable”, says Mrs. Daiva Pagiriene, a single mother of three children. “Now the bank tells me that it suffers certain losses and demands to reimburse them. What a disgrace,- my children are bound to secure higher profit of the bank? It is a destruction of their lives, not only mine.”
Moreover, this year the Supreme Court of Norway issued the ruling on the same financial product which DNB was circulating in Norway. The verdict says that the bank was wrong and must reimburse the losses to the client. Corporate website of DNB declares “We take responsibility for an impact on people”.
We trust that same values are to be applicable in any country that DNB operates: not only to fellow Norwegians but also to the Lithuanians. It would be a huge loss, provided this case would undermine a high positive image of Norway in our country.
The only shareholder of AB DNB bankas is Norwegian group DNB ASA. And the main and single dominant shareholder of DNB ASA is the Norwegian Government - the Norwegian Ministry of Commerce and Industry controls 34 percent.
As the Kingdom of Norway is represented by the Embassy in Lithuania, we rally in front of the Embassy with the hope that this case would be heard and analysed by the prime and biggest shareholder who has the casting vote and crucial impact in decision-making.