VILNIUS, Lithuania ? Lithuania's central bank said it would dismantle a bank controlled by a Russian businessman after regulators discovered large sums of money missing.
Lithuanian prosecutors said Friday that Raimondas Baranauskas, minority owner of Snoras Bank, has been detained in London after they had issued a European arrest warrant on Wednesday.
Prosecutors could not say whether Russian citizen Vladimir Antonov, the bank's majority owner, was also detained. Antonov is the owner of the Portsmouth football club.
The Bank of Lithuania said late Thursday that the dismantling of Snoras was the best solution for the Baltic state's financial system and economy, which have been jolted after the bank was nationalized and its operations halted.
Bank chief Vitas Vasiliauskas said should not waste taxpayers' money trying to help "a plane that won't fly."
"There is no other way to solve this situation," he said.
Hundreds of millions of euros (dollars) are believed to have been siphoned off from Snoras and Latvijas Krajbanka, a subsidiary bank in neighboring Latvia.
Janis Brazovskis, an official with Latvia's Finance and Capital Markets Commission who was appointed to oversee Latvijas Krajbanka, said Wednesday that Antonov's failed attempt to acquire the troubled Swedish automaker Saab might have triggered the downfall of the two Baltic banks.
He said that approximately 100 million lats ($200 million) were siphoned from the bank to increase its charter capital and finance Antonov's investment projects ? including the unsuccessful takeover of Saab.
Deposit holders in both countries are now forced to wait in long lines to withdraw money from cash machines, while companies and municipalities have seen the working capital virtually disappear.
Still, authorities in both Lithuania and Latvia say the two banks' collapse does not pose a systemic risk since they are mid-sized and the two states have ample reserves to guarantee deposits.
Latvijas Krajbanka was Latvia's 10th largest bank by assets after it was taken over by regulators on Monday.
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