Petrom arguing with banks

Petrom dismisses accusations from bankers concerning the frauds involving the payment instruments it issued, arguing the banks had the obligation to verify the validity of the cheques when they accepted them as collateral.
“Petrom does not acknowledge the cheques and the promissory notes resulted from crimes and abides by the court decisions declaring these instruments null. SNP is surprised to see the bankers persist in saying these papers are correct and legal, without wondering why the bank employees did not show prudence and check the validity of the payment instruments when accepting them as collateral, as stipulated by Article 11 in Law 59/1934 and Article 260 in the framework guidelines 7/1994 of the National Bank of Romania (NBR),” the company says.
Petrom says it is not its intention to discredit the cheque or the promissory note as payment instruments, as long as they are legal. The company is still carrying out banking operations with most of the banks involved in the litigation, using and accepting payment instruments as long as they are legal.
“In the cases in which SNP was subpoenaed and could prepare defences, before various courts, about 80 chequebook pages were declared null, while another 40 chequebook pages were suspended pending ruling of the court,” Petrom specified.
The dispute between Petrom, the largest company in Romania ($1.3bn in market capitalisation) and the commercial banks broke out in February, when Gheorghe Medintu, former deputy leader of the PSD (Social Democrat Party) Arad branch, arrested on charges of bribing and taking bribe, was proven to have contracted loans from several commercial banks (about 13, according to the latest available data), by pledging cheques issued by Petrom Arad as collateral.
Following Medintu’s arrest, the commercial banks demanded execution of the guarantees, that is payment of Petrom’s cheques. The position of the oil company did not meet the expectations of the crediting banks, which considered freezing Petrom’s accounts. Sources on the banking market estimated the damages caused by this scandal to amount to more than 400bn ROL.
The bankers have persistently asked NBR to be more active in investigating the cheque fraud at Petrom’s Arad branch, warning this instrument may even cease being used for payments by the banking system.
“We pointed out the opposition and even the complicity of the law enforcement bodies, as well as the Government’s indifference towards Petrom’s attitude, which says it is not liable for the cheque fraud. These instruments were perfectly legal and I must say it is Petrom’s duty to set things straight in its own yard,” Bogdan Baltazar, deputy chairman of the Romanian Banking Association and chairman of BRD-SocGen said at the end of last week.
The bankers explained there was a certain risk that such payment instruments would no longer be accepted as collateral in the future, mentioning that another payment instrument, the promissory note, was discredited several years ago.