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HEAD OF UNLICENSED FINANCE COMPANY THIRD TO BE FINGERED BY POLICE IN WAKE OF FEBRUARY-MARCH CRASHES

Drukos boss Mojžiš charged with fraud

CHARGES of fraud have been laid against František Mojžiš, one of the country's most prominent businessmen.
Police said March 27 that Mojžiš, head of the unlicensed finance company Drukos, used misleading advertisements to raise over Sk60 million this year from 2,091 people for his firm. He faces up to 12 years in prison if convicted.
Drukos closed branches of its daughter company, BDV Družstvo, on February 25 in the midst of a nationwide crisis over failing non-banking entities. The firm held billions of crowns in client deposits when its doors shut.


FINANCIER František Mojžiš remains confident of beating fraud charges.
photo: TASR

CHARGES of fraud have been laid against František Mojžiš, one of the country's most prominent businessmen.

Police said March 27 that Mojžiš, head of the unlicensed finance company Drukos, used misleading advertisements to raise over Sk60 million this year from 2,091 people for his firm. He faces up to 12 years in prison if convicted.

Drukos closed branches of its daughter company, BDV Družstvo, on February 25 in the midst of a nationwide crisis over failing non-banking entities. The firm held billions of crowns in client deposits when its doors shut.

Mojžiš refused to comment on the charges laid against him, but said that he would work with the police. He has not been remanded in custody, but has rejected suggestions that he may try to leave Slovakia while investigations are carried out.

"If I had wanted to [leave] I would have done so long ago," he said.

Police in early March issued international arrest warrants for the heads of two other collapsed finance companies, Horizont and BMG. Vladimír Fruni and Marian Šebeščák were later arrested in Croatia and charged with fraud. Both firms have been put into receivership.

BDV's doors were closed amid a growing panic over the fate of billions of crowns in major non-banking, unlicensed finance companies. On the same day BDV Družstvo announced its branches were shutting, another similar firm, AGW, said it was stopping payment of interest and principal to its clients.

This came just two weeks after BMG and Horizont collapsed, leaving thousands of depositors with little or no hope of reclaiming billions in savings.

All four firms had been offering huge interest rates for depositors, well above average rates on the financial market. Drukos had offered as much as 31 per cent to some clients.

Angry depositors have vented their anger at the government but ministers, while expressing regret over the loss of citizens' savings, have said the government bears no responsibility for the loss of money invested with the firms.

Prime Minister Mikuláš Dzurinda in late February maintained there were adequate laws in place governing the activities of non-banking companies. As of January 1 this year new legislation was introduced requiring non-banking finance entities to submit company details to the Financial Markets Office.

Last month ministers announced the government would not be compensating people who had held deposits with the firms. Deposits in banks are protected by a fund which pays back 90 per cent of deposits in the event of an institution's collapse. Those in finance companies like Drukos are not.

Local media have also suggested that Drukos is about to face bankruptcy proceedings. The daily Pravda claimed March 28 to have a copy of a bankruptcy proposal against Drukos filed by Dopravná banka in a Banská Bystrica regional court. The bank is demanding Sk28 million from Drukos.

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