Panamanian state bank sounds alarm

The state-owned Banco Nacional de Panama (BNP) said Thursday that a billion-dollar lawsuit filed by business magnate Abdul Waked poses a threat to its solvency.

Bank president Rolando de Leon told the media that while the bank’s capital is more than $800 million, Waked is demanding compensation of $1.27 billion in connection with BNP’s role in the sale of some of his assets.

“If the state does not (intervene) and Banco Nacional has to pay, Banco Nacional would have to declare itself in technical bankruptcy since the amount of the lawsuit exceeds its current capital,” said De Leon in an interview with Radio Panama.

Because Panama’s economy is based on the dollar, the country does not have a currency issuer, but the BNP does perform some of the functions of a central bank and a solvency crisis would cause a nationwide crisis, De Leon said.

The legal issue goes back to May 2016, when the US Treasury Department accused Waked, owner of Waked International S.A., of laundering proceeds from drug trafficking.

The inclusion of Waked’s holding company on what is known as the Clinton List was accompanied by legal and financial sanctions against all of his nearly 70 enterprises.

Being added to the Clinton List is a virtual death sentence for an enterprise, as US citizens and firms are barred from doing business with listed entities.

In the interest of preserving jobs, the United States ultimately agreed with Panama on a plan for Waked to sell off firms and temporarily transfer assets to a trust managed by BNP.

Two of Waked’s largest properties, the Felix B. Maduro retail chain and the high-end Soho Mall, were eventually sold.

Waked now argues in his suit that he was pressured by the government and BNP to divest himself of the Soho Mall and that he suffered a loss of $1.27 billion on the transaction.

The businessman already sued the Panamanian government and BNP in July 2017 for $165 million in connection with the Felix B. Maduro case, but the courts refused to accept the suit.

Waked has yet to be charged with a crime by either US or Panamanian prosecutors.

The Panama Banking Association said Thursday in a statement that the court’s admission of Waked’s latest suit after having rejected the previous one denotes “lack of consistency” and “erodes public confidence.”