GILD Bankers investigated for fraud

TALLINN — The Estonian Office of the Prosecutor General announced Monday that it is investigating the GILD Bankers investment bank for a fraudulent real estate development in Azerbaijan worth 250 million krooni (€16 million).

GILD Bankers is a pan-Baltic investment bank headquartered in Tallinn. In 2007, 24 Estonian debenture investors bought bonds worth 250 million krooni in 2007, which was to be invested into the real estate development at Shirvan region near Baku where 900 luxury houses were planned to be constructed. The project was planned to be carried out in five years and the total cost was estimated 400 million krooni (€25 million).

The investigation started in November and one person, Estonian business man and rally driver Erki Piirsalu who does not work for GILD Bankers has been interrogated in suspicion of committing an investment fraud. The prosecutor’s office is revealing little else.

“The public prosecutor’s office opened an investigation against GILD Bankers investment bank under investment fraud,” Kadri Põldaru, Office of the Prosecutor General media spokeswoman told Baltic Reports. “One individual has been interrogated and it is possible that the range of suspects will enlarge.”

The investigators conducted a search in GILD Bankers office in Tallinn on Monday. The computers of Tõnis Haavel, Rain Tamme and Harles Liiv were confiscated. GILD Bankers assured in a press release that it is cooperating with investigators. None of the investment bank’s employees have been interrogated so far.

“We do not give any more information other than in the press release in the interest of the investigation,” Kadri Kütt, GILD Bankers media spokeswoman told Baltic Reports.

According to Äripäev, the investors in the fraudulent deal are First Telecom Trading with 62.6 million krooni (€4 million), HHL Rühm with 46.9 million krooni (€3 million), Kristatos with 30.8 million krooni (€2 million), Seaside Residence Baku with 15.9 million krooni (€1 million), Pirshagi with 15.6 million krooni (€997,000), Trendamo with 13.9 million krooni (€888,000), BPF Financing with 11.7 million krooni (€747,000), Element Ehitus with 11 million krooni (€703,000) and Swedbank AB Clients with 5.5 million krooni (€351,000).

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