Official claims that Business Bank was liquidated for violating laws are being challenged

Official claims that Business Bank was liquidated for violating laws are being challenged. The authorities’ recent decision to close Uzbekistan’s most successful private bank is being viewed with suspicion by financiers, diplomats and analysts, who believe that the move was politically motivated. Business Bank, which was shut down on March 15 for alleged violations of the former Soviet republic’s laws, was on the verge of a groundbreaking investment deal with the European Bank of Reconstruction and Development, EBRD. Askar Haidarov, press secretary of Uzbekistan’s central bank which issued the closure order, refused to comment on the nature of the violations or allegations that the move was politically motivated. But he confirmed that the decision was final and that the bank would be liquidated rather than sold to another institution. A liquidation commission was immediately set up and is expected to complete procedures connected with the closure of the bank within eight weeks. One prominent European banker who had had dealings with the institution agreed that the closure was politically motivated and questioned the authorities’ talk of violations. “Closing down Business Bank, even if it was because of violations, could be compared with closing down Volkswagen because one of the directors broke the traffic rules,” he said. He praised Business Bank for its independence in a country where so many supposedly private enterprises are in fact directly connected to the state. “It was a small bank, but it was a good, dynamic one. They wanted to develop, expand and offer their clients a world class service,” the banker told IWPR. Locally-based western diplomats, European financiers and analysts, meanwhile, have voiced doubts over the government’s motives for closing Business Bank. The sources agreed to speak to IWPR on condition of anonymity. One western diplomat close to Business Bank said, “I don’t understand the central bank’s decision, but it is not connected with any violations - the bank was closed for political reasons.” He told IWPR that central bank representatives had inspected Business Bank on a weekly basis, and that the practises of the latter had been thoroughly checked by its numerous foreign partners.