Estonian savings and loan association Erial continues making payments based on its reorganization plan that it finances through real estate developments. At the same time, the association urges former depositors to ignore negative information and vows to sue over slander in a television ad.
Erial made payments to all shareholders in the first group in its reorganization plan in December. The association is set to make the next round of payments in June of 2023.
Erial's reorganization counsel Ly Müürsoo said that shareholders belonging to the first group were paid 10 percent (5 percent in June and 5 percent in December). Payments to creditors' successors, which require data adjustments, are still outstanding.
The S&L association said it is financing the payments through real estate activities for which it raised capital from depositors. Erial said that 80 percent of depositors' funds were loaned out for real estate developments meant to yield considerable returns on investment.
A televised ad that aired in December sends people to a website showcasing Erial's real estate developments.
Müürsoo said that the company had paid for the ad before reorganization proceedings started and decided to use it.
The clip, aired as recently as on December 24, urges depositors not to heed negative information about the association and assures that payments have been made according to the reorganization plan.
"A campaign of slander meant to discredit Erial is continuing in the media. The information presented is unprofessional and unverified, and we hold such activities to be malicious and aimed at generating negative attitudes toward Erial. Erial will meet every wrongful claim with a lawsuit to protect its members' interests. We wish to thank every Erial member who has not gone along with provocations for their trust," the ad says.
According to the reorganization plan, Erial's obligations amount to over €16 million.
Savings and loan association Erial started in 2018 and had raised €17.2 million in deposits by its second year, after promising depositors 9-12 percent return on investment. Erial ran into trouble when suspicions were brought against its founders in several criminal investigations. The association stopped making payments to depositors on December 4, 2020.
The Office of the Prosecutor General filed charges of embezzlement and investment fraud against seven people and two businesses in May, including Erial board member Daniela Dalberg-Dyageleva and founder Ilya Dyagelev.
Editor: Barbara Oja, Marcus Turovski