What is Linda Rama, Prime Minister Edi Rama’s wife, doing together with other foreign politicians in the executive board of a bank controlled by dubious investments based in a tax haven, managed by a financier with prevailing interests in Russia?
This is a story that starts a long time ago and it is difficult to understand where it will finish.
In 2014, Crédit Agricole, as a consequence of a worsened financial situation, sold its Albanian branch, which it had acquired some years ago from Emporiki, the Greek bank which it controlled.
Crédit Agricole of Albania was bought by Tranzit shpk, registered in Albania in 2009, and licensed by the Bank of Albania to carry out financial activities, such as leasing and factoring, purchasing bad credit and so on.
Tranzit is co-owned for 50 percent each by two investment funds, NHC Balkan Fund L.P. and New Century Holdings XI L.P. Both funds are registered in the Cayman Islands, which is a tax haven. This makes it impossible to verify the identity of its owners.
On May 12, 2015, Tranzit signs the purchase agreements with Crédit Agricole. At the moment of purchase, the total capital of the buyer was around €1.3 million, while the capital of the bank was around €55 million. On the balance sheets submitted to the National Registration Center (QKR), Tranzit has declared an income of about €300,000.
Directly after signing the agreement with Crédit Agricole, the two investment funds that own Tranzit, sold 30% of their shares for €390,000 to Andi Ballta, Albanian with a US passport and CEO of Tranzit since its foundation.
The two investment funds that own Tranzit are registered in at Grand Cayman and both are managed by NHC Capital Inc, an American savings management company, owned by brothers-in-law Moris Tanacinic and George Rohrs. Both from a Jewish-American background, they took part in 1991 in the important wave of privatizations in Russia and afterwards built a system of funds specialized in Russia and Eastern Europe, which are managed directly from Moscow.
NHC Capital declares that it manages 25 private funds which operate in Eastern Europe, and controls at least two banks in Ukraine and Romania. The total value of all its financial activity is estimated at €3,4 billion.
Even though NHC Capital Inc is registered with the financial regulatory entity in USA, the SEC, as an administrator of their investment funds, their special funds and its entire corporate structure is registered in Cayman Islands or in one of the Eastern-European countries, meaning they are not subject to the control of American authorities.
The main branch of NHC Capital Inc is located Moscow under the name NHC Capital Real Estate, which appears to be some kind of Russian savings management company. That is, it manages investment funds and has declared at least three funds created in the beginning of 2000s that are now closed, with a total sum of $1,8 billion. Examples of investments made by these NHC funds, provided by their official website, seems however not justify this high sum claimed by NHC.
In September 2015, Crédit Agricole transfers to ownership of its Albanian subsidiary to Tranzit, a new board of the bank is appointed, and it gets a new name: The American Bank of Investments sha (ABI). On October 17, 2015, the Bank of Albania authorizes the 100% transfer of shares to Tranzit Ltd.
The newly appointed board president is Lorenzo Roncari, an 84-years-old Italian-American, resident of Panama, honorary consul of Uruguay in Tirana, and former CEO of the American Bank of Albania, and former director of ING Italy. The new appointed CEO is Andi Ballta, with board members Armand Muharremi (former KPMG Albania), Mark Crawford (President of American Chamber of Commerce in Tirana), and Rezzo Schlauch (former chairman of the Green Party group in Bundestag, former Undersecretary in the German government, honorary consul of Albania in Stuttgart since 2015, and married to an Albanian actress.)
On December 24, 2015, ABI’s capital was increased from €52 to €56 million, while also paying off a debt previously owed by Crédit Agricole. No other financial movements have been registered to this day. The same holds for Tranzit Ltd, which continues to keep its initial capital of €1.3 million.
On January 17, 2016, the Bank of Albania approved two board members elected only ten days prior, on January 7. They are Lindita Rama, Albanian and the wife of Prime Minister Edi Rama, and Richard Lukaj, an Albanian-American born in Italy. Strangely enough, their official appointment is registered at the QKR only at the end of September 2016. Taking the place of Roncari, whose sudden resignation was approved in October 20, 2016, Kathryn Swintek was appointed president of the board. She is a US citizen and present in a numerous other boards of funds and companies, and worked in the past for BNP.
Right from the beginning, ABI receives a number of “institutional” prizes from the Albanian government and the Municipality of Tirana, even though it has not developed much business, being that from the the moment of purchase the banks income has raised to €63 million – almost a 50% increase – while everything else has remained unchanged.
According to information published on NHC’s website, ABI is also allowed to operate as a deposit for funds controlled by NHC. This might explain the sudden increase of their income; having the ownership of the bank allows NHC to directs the liquidity of the funds it administrates to ABI.
The bank’s management structure would raise doubts in any European country for a series of reasons having to do with the policies followed in all the countries where they fight money laundering.
The ownership structure, which brings you to CEO Andi Ballta and the two investment funds registered in the Cayman Islands and managed by NHC, make it impossible to determine the final beneficiary, and the final impact that these shareholders have in the decision-making process of the bank. The Cayman Island’s legal framework does not allow the identity of shareholders who may force financial institutions to carry out “inappropriate” practices, including laundering dirty money, to be public. Exactly the fact that the funds are registered in a well-known tax haven, meaning that it is supervised by the local authorities which are interested in keeping secret the identity of the shareholders and the company’s shares, feeds the doubt that the bank might be indeed controlled by dirty money and that it might be used for complicated financial constructions such as money laundering.
Meanwhile the Albanian law on commercial societies, as well as the common policies followed by the supervisory authorities of the “normal” world, the fact that the CEO of a bank is the owner, even in an indirect form, of 30% of the voting rights in the shareholders’ assembly of the company (Tranzit shpk) which owns 100% of the voting rights in the assembly, and of which he is also the CEO seems to a complete oddity and beyond the edge of law.
It is clear that such a management structure would be unacceptable in any European country, for obvious reasons of transparency and anti-money laundering policies.
Even the above-mentioned purchase of Ballta of 30% of Tranzit, which for 100% controls ABI, of which he is the CEO, constitutes a doubtful profile from the point of view of international law on anti-money laundering, because it seems to be a transaction completed under different prices than the ones of the market.
Andi Ballta bought 30% of Tranzit at a price of €390,000, while he and his partners knew very well that the company would become the real owner of the bank with a capital of €55 million. This transaction was made after the deal with Crédit Agricole was signed, but before the Bank of Albania signed off on it, from which moment the Bank of Albania would have to approve the transaction. And what if the beneficiary of the 30% in shares was in reality somebody else?
Hypothetical, but plausible scenarios
A bank in Albania can perform many actions, the simplest and the most normal of them being collecting savings from the public, income which is then given in the form of loans to companies and individuals. But this is relatively difficult because reasons of the minimum size of the bank, low interest rates, and because the bank is not part of an international banking network.
In Albania, a bank can function as an operational base to manage strategic investment campaigns in big projects (for example, using Russian capital deposited on offshore funds which are partners of the bank), providing political coverage and financial security, especially under the umbrella of the government, as the presence of individuals in the board with a history or ties to politics might suggest in this case.
Or finally, a small bank, isolated from the system, with a highly centralized administration, may also serve in the cautious and properly secret management of the financial flow in a corrupt system by laundering the dirty money produced by, for example, drug trafficking.