Former chairman of Banca Transilvania placed under arrest

The Romanian financial market is in shock. Iosif Pop, former chairman of Banca Tansilvania and one of Romania’s most enduring bankers, was arrested in connection to the fraud committed at the bank’s Bacau subsidiary.
The prosecutors with the National Anti-corruption Prosecutor’s Office (PNA) on Tuesday night ordered a criminal investigation into this case. Pop was taken into preventive custody, as he is accused of having illegally granted credits worth 19 billion ROL to a company manager – Benone Beca. Moreover, Pop is also accused of failing to take measures for enforcing the banking guarantees, although Banca Transilvania was incurring big losses (almost 160 billion ROL) because of the Bacau fraud.
The first information on the subsidiary’s problems emerged this spring. The first arrests were made in October, starting with the branch’s manager Carmen Negoita, only to be followed by other bank clerks. They are accused of having associated with several company owners with intent to commit fraud.
The bank has lost 75 billion ROL because of this fraud, and the amount could not be recovered.
Sixty persons are being investigated in relation to this file. Iosif Pop, head of the Cluj Chamber of Commerce until yesterday, and Nicolae Tarcea, head of the banking risk and legal department at Banca Transilvania, were summoned on Tuesday in Bacau to be heard on this file.
After several hours of hearings, conducted at times by the PNA Bacau prosecutor and after being confronted with the former manager of the Bacau subsidiary and other bank clerks, an arrest warrant was issued for Pop. He is now in the Bacau Police custody.
Nicolae Tarcea was not arrested, but must remain available at any time for the investigation, because he is acquainted with the entire case.
“This was practically only one file. Others may emerge, because the problem of the Bacau subsidiary is in fact an entanglement of criminal actions. We will only know in the end whether Iosif Pop was really involved,” Nicolae Tarcea told Ziarul Financiar. He would not comment on the authorities’ decision.
According to some sources, the clerks from the Bacau subsidiary that were involved in the fraud have teamed up against Pop. The irony is that he was the one to inform the authorities about what was going on in Bacau.
Pop became known after he created Banca Transilvania and constantly increased its value. Eight years ago, the banker started the bank with four million dollars, but its value had increased to 65 million dollars this spring. It is said that, under Pop’s iron hand, the employees were not very happy and he was not exactly popular. His image has been impeccable so far and that is precisely why many investors bought Banca Transilvania shares, which are traded on the Stock Exchange.