SERIOUS INVESTOR & MONEY NEEDED TO FIX GLUMINA BANKA - SKREB

( Editorial: --> 2764 ) ZAGREB, Sept 24 (Hina) - If serious investors, who could cover the losses of Glumina Banka, are not found within a relatively short time, the bank could be forced into bankruptcy, Croatian National Bank (HNB) Governor Marko Skreb said on Thursday. The bank could be financially reorganised if the potential investor would cover its losses amounting to more than US$108 million and invest at least another US$164 million, Skreb told reporters in Zagreb. Grandinvest Corporation, which has applied as a potential investor, should submit all the necessary documentation on its operations and investments in Glumina bank, otherwise the HNB "would not shun" initiating bankruptcy proceedings against Glumina Banka, he added. The Croatian central bank has very little, almost no data on Grandinvest Corporation. The HNB has conducted an investigation which showed that Grandinvest Corporation is based in Belize and is registered as an off-shore company, which means that it is under no obligation to submit the required data. However, the HNB recently received a letter from the company, with an Los Angeles address, which makes the company's reliability questionable. Since the HNB had no information on the company, it released no statement on the letter. The required data did not arrive by September 22 and the HNB sent a rush note. "If the necessary documents arrive, we will assess whether this is an investor who could invest into Glumina bank," Skreb said. On September 18, the HNB advisory board decided that there was no economic reason why the Government should propose for Glumina bank to be reorganised with money from the state budget. A detailed analysis of the recoverable activities of the bank, which was conducted by employees of the HNB's bank supervision department, showed that the problems faced by Glumina bank were not only in the field of liquidity, but that the bank was deeply insolvent as well. It was also found that there were cases of additional capitalisation of the bank via loans for the purchase of its own shares, as well as bad management and irregular procedures. Asked about the difference between Glumina bank and Dubrovacka Banka, whose reorganisation with money from the state budget has been approved by the Government, following an HNB proposal, Skreb said it had been taken into account that the whole economy of the Dubrovnik region "lay" in Dubrovacka bank, while no such reasons were found in the Glumina bank case. (hina) jn rml /mbr 241623 MET sep 98