The Bank of Moscow today held a shareholders' meeting aimed at sacking the chairman of Krediidipank's supervisory board, while a spokesman for the Estonian bank sent out an emotional plea to the media, saying the Bank of Moscow is acting illegally.
The Bank of Moscow owns 60 percent of Estonia's Krediidipank; the spokesman told uudised.err.ee that they need at least 66.7 percent support to remove Chairman Andrus Kluge from his post.
But the Bank of Moscow turned to technicalities in its assault, claiming that Kluge's and others' failure to properly register themselves as qualifying shareholders should be penalized with a reduction in stock, giving the Bank of Moscow its needed two-thirds holding.
Whether regulators agree, and whether Kluge will stay on board or not, is yet unclear.
The Estonian Financial Supervision Authority ruled a month ago that Kluge must step down, and attempted to ban him from working as a banker in the EU. A ruling that Kluge appealed against and the case is currently in the courts.
According to the oversight agency, Kluge failed to report to authorities when his company purchased and quickly resold 16 percent of the bank's shares in 2011. Officials have reportedly also questioned the legitimacy of the source of Kluge's financing used to make the transaction.
But Kluge, who was previously the head of the bank, has accused the Financial Supervision Authority of being manipulated by the Bank of Moscow - claiming that the two lawyers representing the Russian bank and the regulator are close friends - after Kluge and supporters resisted the majority shareholder's rise to prominence.
The matter is complicated by a row in which the current executives of the Bank of Moscow allege that hundreds of millions of euros went missing during the time of the previous CEO, Andrei Borodin, who fled to London amid embezzlement charges. Sources have claimed there is a connection between Kluge and Borodin.