The Italian lender Banca Progetto has been placed under court administration for allegedly giving state-backed loans to companies linked to the mafia.
According to prosecutors in Milan, firms managed by people associated with Italy's notorious 'ndrangheta group were able to secure more than €10m in credit.
By granting these loans, officials argued that Banca Progetto violated anti-money laundering policies. These require certain checks to be made on borrowers.
The loans were guaranteed by state-owned bank Mediocredito Centrale through a fund for small and medium enterprises.
This state aid was designed to support businesses through the pandemic, as well as through Europe's energy crisis following the invasion of Ukraine.
In a statement released on Thursday, Banca Progetto sought to clarify misconceptions that it has been placed under total administrative control.
The lender is under court administration, meaning that a court-appointed external administrator, Donato Maria Pezzuto, will oversee certain parts of its operations.
This is a safety measure to ensure official procedures are being properly followed.
"Banca Progetto Spa therefore intends to reassure its customers and stakeholders that it will continue to operate in a completely ordinary manner through its internal bodies and structures," the lender explained.
It added that alleged shortcomings related to 10 loans out of a portfolio of 40,000.
The news comes after Oaktree Capital Management struck a deal in early September to sell Banca Progetto to funds managed by private equity firm Centerbridge Partners.
Oaktree originally bought the lender in 2015, under the name Banca Popolare Lecchese. A year later, it was relaunched as Banca Progetto.
Disclaimer: The copyright of this article belongs to the original author. Reposting this article is solely for the purpose of information dissemination and does not constitute any investment advice. If there is any infringement, please contact us immediately. We will make corrections or deletions as necessary. Thank you.
