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. Last Updated: 07/27/2016

Western Creditors Withdraw From Tokobank Committee

Foreign creditors of Russia's Tokobank said Thursday that they were pulling out of a committee set up to oversee claims against the troubled bank and they requested a new meeting of creditors.

"The foreign members of the creditors' committee regret this course of action but consider it as the only one available to them for both legal and ethical reasons," Dresdner Bank AG said in a statement issued on behalf of the foreign creditors.

The other foreign members of the creditors committee are Bank Austria AG and the International Finance Corp., it said.

The foreign creditors made the decision after two court rulings concerning the presence of five Cyprus-registered companies in the committee.

In November, the Moscow Arbitration Court challenged the validity of the registration of the companies and ruled they be removed from the register of creditors, the statement said.

But a district court granted a preliminary injunction in December in connection with the legal proceedings, it added.

Tokobank formed its creditors committee in October, following the imposition of temporary Central Bank administration on the bank.

The five Cyprus companies were recognized as having 31.9 percent of the total claims on Tokobank, it said.

But the Dec. 21 injunction by the Cheryomushkinsky District Court prohibited the temporary administration from "using the decisions of the creditors' meeting as an official document."

Tokobank, once one of Russia's biggest banks, ran into trouble in the spring due to what the Central Bank described as poor management and liquidity problems.