OREANDA-NEWS. December 18, 2009. SEB Estonia acted as arranger of the corporate bond issued by OU TR Majad in June 2007. OU TR Majad was declared bankrupt on 28 November 2008 and has not honored its commitments, reported the press-centre of SEB.

The obligations under the OU TR Majad bond were secured with financial collateral and SEB Estonia held the collateral on behalf of the investors. As the collateral agent SEB Estonia had certain obligations to inform the investors of material events within a time limit of ten days. The bank became aware of such an event, the disposal of assets that formed part of the collateral for the bond, on 29 February 2008. Thus SEB Estonia should have informed the investors no later than on 10 March 2008, but failed to do so until 9 April 2008.

SEB Estonia has decided to compensate all investors as of 10 March 2008 for the losses made on the investment in the OU TR Majad bond. The total compensation amount will be EUR 11.3 m, which equals 100 per cent of principal amount and coupon interest of the bond until maturity.

Ahti Asmann, head of SEB Estonia comments,
In SEB we always strive for the highest possible professional standards and for strong and long-standing customer relations. SEB has a long-term commitment to serve its customers in Estonia.

In this specific case we did not fulfill our information obligation in due time – we were four weeks late. It has been hard to define the exact impact for investors of the bank’s omission. As this has had negative financial consequences for the investors, SEB Estonia has decided to compensate the investors in full.

SEB Estonia will immediately contact all investors to administrate the payment of the compensation.