Most frequent myth circulated in the Czech media
CSOB erred in its management of a receivable from J Ring (totalling CZK 1.7 billion including interest). By transferring it to CKA wrongly and in conflict with the Banking Act, which states that a promissory note has to be endorsed when it is transferred, it made it impossible for the receivable to be recovered from the debtor. The error was confirmed by a court, which ordered CSOB to return the whole value of the receivable to the agency.
CSOB quote
“The Receivable from J. Ring was properly claimed from the debtor by CSOB employees and the entitlement to it was confirmed by a court in bankruptcy proceedings. CSOB will continue to insist that the government pay it the full value of the receivable from J. Ring. CSOB currently prefers negotiations, but does not rule out going to international arbitration to recover payment,” said Pavel Kavánek, CSOB Chief Executive Officer.
Background information
The receivable was never returned from CKA to CSOB. As the court said that the contracting parties (CKA and CSOB) used an inappropriate type of contract for the transfer, in legal terms the asset never “left” CSOB. Therefore, CSOB returned to CKA the amount the agency previously paid it for the receivable.
The court, however, fully acknowledged the existence of the receivable from the debtor in an enforceable court ruling. It is not therefore possible in any way to contend that, by inappropriately assigning it to CKA, CSOB caused any damage to the value of the receivable. There is clear evidence that CSOB assigned the receivable exactly the way that CKA wanted (it was the assignment of a “forced loan” from a bill paid for the debtor instead of the assignment - “cession” - of the bill itself).
By the way, the debtor was a shareholder in the former IPB and, under a contractual arrangement, was acting in concert with Nomura.