HERCEGOVACKA BANKA GRANTED LOANS GREATER THAN ITS CAPITAL

MOSTAR, Dec 19 (Hina) - The Mostar-based regional Office of the international High Representative (OHR) on Wednesday officially confirmed that the company "Monitor M" had taken out unusually high loans from Hercegovacka Banka. Because of suspicions in the bank's business, High Representative Wolfgang Petritsch introduced temporary administration in April, when more than a million of the bank's documents were confiscated with the assistance of SFOR. According to the main business book, Hercegovacka Banka is currently setting aside 21% of its basic capital, which amounts to 20 million convertible German marks to "Monitor M", spokesman for the OHR in Mostar, Mario Brkic, said on Wednesday. "In various periods of its relationship with the Hercegovacka Banka, the Monitor M company took out loans which exceeded the bank's overall capital," Brkic said, adding that these funds were then used for servicing the company's debts. The majority shareholder of the Monitor M company is a member of the Croatian parliament and of the Croatian Democratic Union (HDZ), Ljubo Cesic Rojs- By normal banking procedures, loans are granted only to those companies and individuals who have incomes and who are estimated to be able to pay off the loan. "The Hercegovacka Banka ignored the regulations, and as a result, 80 percent of the deposit, which amounts to 88 million marks, were given out in loans," Brkic said. (hina) lml