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Old town of Schmalkalden: Two special representatives of Bafin will act in the bank in the future

Photo: Jacob Schröter / IMAGO

The entire supervisory board of the controversial Volks- und Raiffeisenbank Bad Salzungen Schmalkalden has resigned. Apparently, the supervisory body has thus pre-empted his dismissal: The tasks of the last 16 members of the supervisory board are now to be taken over by a special representative, who is provided by the Federal Financial Supervisory Authority (Bafin) to the bank, the bank announced on Tuesday evening. This was communicated by the supervisory authority in a decision.

It is already the second special representative appointed by Bafin. Only at the end of last week, the financial supervisory authority had installed Christian Gervais as a "special representative with management authority" for the Volks- und Raiffeisenbank. Together with the works council and employees, as well as with the support of the protection scheme of the Federal Association of German Cooperative Banks (BVR), Gervais is "working at full speed to overcome the current challenges".

Bafin calls for more equity capital

VR-Bank Bad Salzungen Schmalkalden is in the sights of the financial supervisory authority Bafin, among other things, because of risky credit transactions. According to SPIEGEL information, it is about the bank's customer structure as well as its apparent reluctance to cooperate with Bafin and the cooperative association BVR. Bafin also has unanswered questions when it comes to money laundering prevention, for example about dubious cash flows. (Read more here.)

Bafin had recently demanded that the Thuringians hold significantly more equity, as several people familiar with the matter had said.

The Thuringian bank is nicknamed the "Effenberg Bank" because it has been focusing on the business field of football financing for years and has counted former national player Stefan Effenberg among its employees since 2018 in order to use his contacts in the football scene. Among other things, it grants loans to professional clubs and therefore became known nationwide as the "Effenberg Bank".

Special Representative Gervais welcomed the appointment of the second Special Representative to the Supervisory Board. The supervisory body is crucial for the bank's ability to act, he said.