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VILNIUS, Lithuania -- Three senior Lithuanian banking officials were arrested on suspicion of fraud in connection with the failure of the country's biggest commercial bank, a government official said Thursday.
The chairman of Innovation Bank, which was declared insolvent Wednesday, was arrested after a dramatic 12-hour standoff in which he hid inside the bank while anti-terrorist units surrounded the building, the official said.
Vygintas Geniotis, a commissioner in the Lithuanian Interior Ministry, said two top bankers at Litimpeks, the second-largest commercial bank which was set to merge with Innovation Bank, had been arrested Wednesday evening.
The arrests were made after a tip-off from the Central Bank of Lithuania which suspected the bankers had not lived up to their professional obligations in evaluating financial losses, he said.
"We acted at the request of the Bank of Lithuania [central bank]," Geniotis told a news conference.
The central bank Wednesday declared Innovation Bank insolvent after an inquiry connected with its planned merger with Litimpeks.
Innovation Bank holds 16 percent of all savings deposits in the small Baltic state and alarm spread among the public.
Branch offices quickly filled with customers lining up to withdraw their savings in the wake of the scandal.
Geniotis said Innovation chairman Arturas Balkevicius was arrested pending charges of allegedly defrauding the bank of the sum of 271 million litas ($68 million).
It took almost 12 hours to cajole the chairman into leaving the premises as he had barricaded himself inside the bank with security guards denying entrance to everyone, including the police.
"We faced some difficulty negotiating with Balkevicius since the bank's security men did not let the police enter the building," said Geniotis.
He said Balkevicius finally came out after a plea from the central bank governor, Kazimieras Ratkevicius.
Gintautas Preidys, chairman of the board of Litimpeks and top bank official Jonas Mackevicius were arrested late Wednesday on charges of fraud relating to the sum of 137 million litas ($34 million), he said.
Central bank chief Kazys Ratkevicius said Wednesday that authorities had a set a time-frame of two to three months to see if the Innovation Bank could be saved.
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