CALLS have been made for Celtic’s biggest shareholder to clear the air on multimillion-pound money laundering concerns at a bank he partly owns.
Irish-born tycoon Dermot Desmond holds just under one third of Latvia’s Rietumu Banka shares and sits on the institution’s ruling council.
The bank was last year fined £30,000 by Latvian authorities for “violations of money laundering and terrorist-financing laws”.
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Earlier this year French prosecutors told Latvia’s public broadcaster LSM they were considering criminal charges against the bank and some of its executives. There has been no suggestion Mr Desmond, as a shareholder or board member, had any knowledge or involvement in wrongdoing.
France has been looking at Rietumu for some years as part of a wider investigation into an alleged wider tax avoidance scandal said to have cost the country millions of pounds in revenue.
Neither Mr Desmond, who has a 31 per cent shareholding in Rietumu Banka, nor the bank itself would make any comment on the investigation.
But MSP Patrick Harvie, co-convener of the Scottish Green Party, said Mr Desmond should address the issue. He said: “Tax avoidance is one of the global scandals of our age, and drives immense inequality around the world.
“No bank and no business should be shielded from scrutiny, and this case is no different.”
Mr Desmond, a tax exile who owns his shares in Celtic through an offshore structure in Gibraltar, has been a Rietumu shareholder since 2005. His initial investment in the bank was understood to be about €100 million. There has been no update on France’s investigation since April when prosecutor Ulrika Delaunay-Weiss spoke to LSM.
Asked on the broadcaster’s De Facto programme if Rietumu willingly collaborated with money laundering rather than doing so inadvertently, Ms Delaunay-Weiss replied: “That’s the position of the investigating judge.”
She added: “That’s why he charged them. He thinks because of different elements that the bank and some of the responsible persons there knew that it was... how can I say ... a system of money laundering.”
Latvia’s Financial and Capital Market Commission (FCMC) has two outstanding sanctions in place against Rietumu Banka. This includes a £30,000 fine imposed in May last year.
The watchdog’s website said this was for “violations of the provisions of the Law on the Prevention of Laundering the Proceeds from Criminal Activity (Money Laundering) and of Terrorist Financing and FCMC regulations: weaknesses in the internal control system – deficiencies in customer due diligence and monitoring of exposures”.
The bank in 2014 was given an FCMC warning for “violation of the provisions of the Credit Institution Law: inadequate reputational risk assessment of exposure to a customer”.
The Herald made repeated attempts to ask Mr Desmond to comment. The Dublin office of his investment firm did not respond to phone calls or emails.
We also called and emailed Celtic Football Club for a comment. It did not respond.
Latvian banking has come under intense scrutiny in recent years amid concerns that banks in the former Soviet Union have been used to transfer money from Russia and Ukraine to offshore jurisdictions.
Rietumu Banka, which provides accounts in dollars, has described itself as a “bridge between east and west” and boasted of its significant number of Russian depositors. Rietumu did not respond to requests by The Herald for comment.
The bank’s website, however, sets out a firm policy against gangsters and terrorists using its accounts.