Raiffeisen CEO quits over offshore deals

Fri May 24, 2013 8:21am EDT
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By Georgina Prodhan and Michael Shields

VIENNA (Reuters) - Raiffeisen Bank International (RBIV.VI: Quote) Chief Executive Herbert Stepic resigned on Friday in what he called an effort to spare his bank from negative publicity over personal property deals that triggered scrutiny by the lender and regulators.

Stepic, 66, again denied wrongdoing in using front companies in the Caribbean and Asia to buy flats in Singapore in 2006 and 2008 - deals exposed by the Offshore Leaks investigative journalism project - but said he decided to quit out of loyalty to Raiffeisen.

"Given the media reports, I soon became aware that, despite the facts, a debate was taking place that threatened to do massive harm to my company," a drawn-looking Stepic told a news conference packed with journalists and television cameras.

RBI's supervisory board has still to accept Stepic's resignation, but his fate seems sealed, and officials said a formal decision was due within days.

Top members of the board issued a statement calling Stepic's action "a sign of great loyalty to the company. It is great credit to him that he shows with this difficult decision willingness to avert reputational damage."

Stepic says he did not need to notify his bank or regulators about three apartments in Singapore he bought via "project companies" set up with the help of Swiss bank UBS UBSN.VX in the British Virgin Islands and Hong Kong.

Those deals are now under investigation by Austria's central bank, its Financial Market Authority (FMA) watchdog and Raiffeisen itself, which has said it will check if his action violated the law or internal guidelines.

Stepic's abrupt fall from grace removes a larger-than-life figure who made Raiffeisen into central and eastern Europe's second-biggest lender, with 60,000 staff in 17 countries.   Continued...

Raiffeisen Bank International's Chief Executive Herbert Stepic addresses a news conference in Vienna May 24, 2013. REUTERS/Leonhard Foeger