The twisted VEB Bank saga has gained a new level of complexity after the parliamentary committee investigating the money trail in the defunct Soviet-era bank said a former central bank governor had submitted a forged document during a hearing last year. The bank official, Vahur Kraft, responded today, saying he was not aware that it was falsified.
The committee was set up in March 2013 to investigate what appeared to some to be a botched attempt by Estonian officials in the 1990s to recover Estonian funds frozen in the bank. It was sparked by the revelation, in a central bank internal audit, that in 1995 someone at the Bank of Estonia misrepresented the true situation in order to try to recover money from the Russian Federation.
Now, committee chairman Rainer Vakra says that former central bank governor Vahur Kraft, whose signature appeared on the 1995 document, also submitted a forged document at a hearing in October last year.
"Testing conducted by the Forensic Science Institute found that it was a copy that was fabricated based on details on another VEB Bank letter, along with a copy of a signature," Vakra said in a press statement. Another document was also entered as evidence by Kraft, and testing on that one is pending.
Kraft said he had been handed the document by third parties and had no reason to doubt its authenticity. "I reaffirm that I have not deliberately given the committee false information, and I apologize," said Kraft on uudised.err.ee. "I forwarded a document in good faith, which I had received earlier from third parties."
Kraft had been called in to the committee in 2013 to testify on matters related to the original 1995 document, which said that a Russian company, TSL International, had a claim for 32.3 million dollars frozen in the Soviet-era VEB Bank.
Only resident Russian companies were eligible to get back the frozen funds, which may explain why a Russian company was credited as having the claim to the funds.
An audit conducted by the Bank of Estonia in 2013 found that although the bank sent a letter to the Russian Federation government in 1995 saying that the mystery company had such a claim, the details were false.
Vakra said it was too early to tell who forged the new letter, how the letter fell into Kraft's hands, and whether Kraft was aware that it was forged.
"If there are elements of a crime, the facts can be ascertained by investigative authorities,“ he said.
The Parliamentary committee is due to report its final findings to the Parliament by April 7.
The VEB Fund, set up by the Estonian government in the 1990s as a stopgap solution to appease VEB depositors, was liquidated years later with the securities essentially worthless, angering a number of companies.
Last year, the Supreme Court ruled the liquidation lawful.