The announcement came directly from VOL PKLM’s chief executive Riskyus Gambulus at lunchtime today in a statement hurriedly issued to the press.
Legoland’s third largest financial institution will cease all operations permanently from 12:00am Friday 27th February with the loss of 35 jobs after the lender posted losses of £194m in its first months of operation. To make matters worse, Mr Gambulus said that an additional £200m in outstanding loans may need to be written off as bad debts in 2010 as borrowers struggle to repay.
The bank, launched in 2008 is itself a subsidiary of the nation’s largest lender, VOL. Today’s shock news has led to both institutions being severely criticised for failing to provide any prior indication that PKLM was in financial difficulty.
“We did all we could to keep the ship afloat but we have had issues with a number of our debtors and creditors” the statement read. Mr Gambulus did not provide names but Ms Cautious Readingus from independent auditors PricewoodhousePieces gave some clues.
“It appears that the parent company VOL has shifted loans made to a number of clients deemed high-risk onto the books of PKLM to reduce the likelihood of incurring losses. These loans have, however, turned bad. The clients involved are believed to consist mainly of professional football clubs in the LFA SuperLeague and one or two firms in the energy and automobile sectors who borrowed heavily to finance huge construction and expansion projects”.
PKLM’s reputation has now hit an all-time low but the group has had previous troubles in its short existence. In October 2008 officials at the bank were questioned by the Criminal Assets Bureau after it was reported by SuperLeague club Napoli that over £60m was absent from their accounts.
According to media speculation at the time the PKLM officials were suspected of embezzling the funds to appropriate wealth for themselves yet it now appears likely that the monies may have been used to stave off creditors.
Customers with deposits at the bank have been told not to panic and that the VOL is in the process of seeking permission to transfer PKLM deposits to their volts under the watchful eye of the state regulator, the Financial Regulatory Authority.
In Legoland City, General Secretary Obnoxious Consensus said he was saddened by the news but vowed that his cabinet would help those left jobless by the bank’s failure.
“Unlike those politicians in the opposition, New Brick Order is a party of doers not moaners. We will work with our partners in the public and private sectors to get things moving again.”
Consensus’s NBO has faced fierce disapproval in recent weeks with the deteriorating economy. The party has rejected calls to hold elections as the latest TLT/CC poll indicates their vote has plummeted to 20% with the Legoland Communists on 39% and Legoland First on 17%.