Konsolidacni Banka, the Czech state factoring bank, has today announced that it has cancelled an agreement made in June with U.S. Ayres Corp. A reason for the cancellation has been given by a spokesman for the Czech bank, who said that Ayres had failed to meet a contractual requirement by not bringing operating capital to their Czech unit in Let Kunavice. The spokesman, Jiri Pekarek, went on to say that “Let’s management had not been strengthened and …operating finances were not provided.”
Let have been allowed a month to respond to the decision. It has been estimated that the unit owes Konsolidacni several billion crowns. The situation highlights the need to introduce legislation to regulate the factoring industry in the Czech Republic, as much for the sake of the factors as for their clients.
Reuters
