One more time we have to read articles on corruption and mismanagement around Latvia and its free port.

As published on September 22nd, 2013 we read in Diena.lv, LA.lv, 10minutes.lv, labz.lv, delfi.lv, tvnet.lv and bnn-news.com the following, really worrying article:

“BATL supports the initiative to divert profits from port activities to Latvia’s state budget

The Biedrība Baltijas asociācija – Transports un loģistika (BATL) supports the initiative of the Economy Ministry to amend the current regulations to allow the transfer of a portion of Latvia’s ports’ revenue to the state budget starting January 1, 2014.

“It is not the introduction of new taxes on port Boards that will reduce the overall competitiveness of Latvia’s transit corridor but the state’s inability to prevent the arbitrariness of the management teams of Latvia’s ports, which often results in scandals, criminal accusations, irresponsible realization of investment projects and other unpleasant activities. This fact is proven with conclusions from the prosecutor’s office, Corruption Prevention and Combating Bureau, the European Commission and courts,” – as BATL informed BNN.

“We are certain that it is not possible to increase the competitiveness of Latvia’s transit corridor while the arbitrariness of Latvia’s ports still remains, allowing port Boards to freely operate state and municipal assets, not pay taxes and freely manipulate port financial resources as they see fit,” – BATL states.

BNN reports further more:

This is why BATL has decided to support the ministry’s initiative. The association believes that this step will become a signal for the improvement of Latvia’s transit corridor. BATL believes it will not only supplement the state budget but will also force members of port management Boards to seriously rethink their current lifestyle.

…”

Read also in Latvian and Russian on the BNN news portal

The Baltic News Network on their reports about plan of BATL to get the Ventspils Free Port Authority management replaced (in Latvian). The interesting article published on November 4th 2011 reads as follows:

“Ventspils Free Port Authority (VFPA) has long been practicing systematic violations and purposeful contra-action towards business interests of companies operating in Ventspils port, Baltic Association of Transport and Logistics (BATL) told BNN.

“Openly irrational actions, hidden and short-shortsighted decisions taken by the VFPA managers as well as delayed decision-making often endanger and will keep endangering foreign investments in Latvia. This undermines Latvia’s reputation of a decent business partner and lays grounds for deteriorating political and economic Latvia’s relationship with the western and the eastern neighbouring countries,” Aivars Gobins, Chairman of BATL, writes in an open letter to the Prime Minister Valdis Dombrovskis, Transport Minister Aivis Ronis, Economy Minister Daniels Pavluts, Finance Minister Andris Vilks, Local Government and Regional Development Minister Edmunds Sprudzs and first deputy of Ventspils City Council Janis Vitolins.

He points out that, during the past ten years, companies operating in Ventspils port and Ventpils City Council opposition deputies have repeatedly approached the Saeima, the President, ministries as well as other competent authorities with complaints about the VFPA’s negligence over investors.

“The reason for that might be the officials’ private interests, which serve as an obstacle for investors to develop their businesses since they are not considered to be loyal to the city power. Moreover, we have also come up with possible solutions and law amendments that have been neglected so far.”

“The VFPA board reviews nearly all proposals, requests and applications by such “unloyal” companies behind closed doors, without participation of investors representatives. These meetings are entirely secret, which alone suggests that the management of the port has a reason to conceal their motives behind their weird and unreasonable decisions. The VFPA is also often avoiding meetings with investors representatives,” according to the letter.

…. ”

Read this article in English or Latvian in the Baltic News Network Portal.

as the Baltic News Network reports according to BATL – the Ventspils Free Port is lobbying its companies instead of the interests of Latvia.

In the article published June 9, 2011 BNN reports, that

“The Baltic Association of Transport and Logistics (BATL) warns Ventspils Free port administration’s activities against AS Ventspils Grain Terminal clearly suggest once more the changes are necessary within Ventspils Free port administration.

Kazakh investors own 100% of AS Ventspils Grain Terminal, which is a perspective project to strengthen the economic relations between Latvia and Kazakhstan. If the project was implemented successfully, it would be a signal also for other investors to place financial resources in the Latvian economy. The association agrees to Economy Minister Artis Kampars description of Ventspils Free Port activities – irresponsible, mismanaged and anti-governmental, according to BATL statement.

BATL, which is made up by the leading companies operating in Ventspils Free Port, point out they are forced to deal with the methods of its administration and its arbitrary, economically ungrounded and different decisions regarding a number of companies.

Similalry, BATL also stresses the port has turned into a private company run by a small number of individuals and its key aim is no longer to develop the port but to lobby «their» companies and harm others. …”

Read the whole article in English or Latvian in BNN.

Articles related to the same subject can be found at:

Delfi.lv

News.lv

Riga24.lv

Batl.eu

The article of BNN reports this threat with reference to inside sources.You can find the original English Article here.

There is also a Latvian and a Russian Version available.

Rease an abstract here:

There are suspicions about possible attempts to steal Latvias Naftas Tranzits‘ (LNT) cash worth millions by means of issuing a loan to Oleg Stepanov’s company Topmar.

It is said that Stepanov is trying to make sure LNT Supervisory Board agrees to pay Topmar the share belonging to Ventbunkers/Ventrans Riga. This is the reason for the convened LNT  Supervisory Board meeting.

It should be mentioned that this kind of scheme was done already last year: it circumvented the property arrests presented in Lembergs’ case.

Stepanov’s need for LNT’s money within the Ventspils transit business is explained with both the need to maintain the millionaire’s expensive place of residence and the political ambitions in expectation of change in government, for the realization of which Ventspils transit business players traditionally use company resources. In the last half-year, there have been signs that Stepanov has formed an alliance with Aivars Lembergs, on behalf of which he conducted negotiations for extensive settlement during the so-called Ventspils transit war.

...

Find the Articles in:

Baltic News Network:

Dzintars Kass disgraces himself over trumped-up charges

The Ventspils prosecutor Nadezda Jakusonoka on July 24, 2012 dismissed alleged charges of intentionally concealing information from the tax authorities (Art. 217, Subsection 2 of the Criminal Code) against the legitimate Ventbunkers management board members Alvis Haze, Janis Haze and Mihhail Dementjevs. Thereby she rejected false accusations and established that their activities had no nature of offence in accordance with this clause...

Readon in Baltic News Network English, Latvian

More articles on Dr. Rudolf Meroni can be found here:

Amazon - books written by Dr. Meroni

Astonishing Latvia on Dr. Rudolf Meroni

The BNN article in English language starts as follows:Under the title "Prosecutor General's Office too weak for Lembergs" BNN reports:

The accused Latvian politician Aivars Lembergs seems to be gradually recovering his control over the Latvian oil business. His moves remain unnoticed and are partly approved by inactions of the Prosecutor General’s Office.

Ventspils millionaires Olafs Berkis, Olegs Stepanovs, Igors Skoks and Genadijs Sevcovs have been elected into the AS Ventspils nafta Supervisory Council. They are all believed to have in mind one and the same thought of selling the Latvian oil business. They intend to do it bypassing the state as the potential owner of the seized Lembergs’ shares.

Besides, the persons have carried out a variety of schemes that have brought the state and the company huge losses. Now there is a possibility that national oil business will simply be sold and the money will travel straight into the pockets of Lembergs and Berkis. But the Prosecutor General’s Office seems not to to be concerned.

The enthusiasm from 2007 about the fight against corruption has practically faded and politicians no longer fear possible punishment that much. Lembergs recently gained access to oil companies’ money in cooperation with Berkis, Skoks, Sevcovs and Stepanovs, who had falsified documents and held a number of fake shareholder meetings. This makes it easier to keep bribing politicians and officials who are never tortured by their conscience.

Lembergs also benefits from Berkis’s public relations campaign, where false facts cast shadows over the legitimate management of AS Ventbunkers.

In most cases, when they talk about the true Ventbunkers’ majority shareholder, they choose to miss out on a crucial detail. Although they do mention the Swiss attorney Rudolf Meroni, they never say a word about the national interest of Latvia as a state.

Looking back at the events leading up to the dispute among Lembergs, Berkis and Meroni, it should be noted that back in the summer of 2005 100% of shareholders appointed the Swiss attorney as the Chairman of AS Ventbunkers Supervisory Council. Already back then, a fight broke out between the shareholders Berkis, Stepanovs, Skoks and Sevcovs, who could not find common ground with Lembergs. As a result, Meroni turned out to be the neutral party – later to be appointed as the custodian of the assets seized within the framework of criminal proceedings.

In 2009 it emerged that not only Lembergs had employed schemes to direct money away from Ventbunkers. Also Berkis and his associates had done the same via the two clients of the company – Gunvor and Litasco.

To read the full article please go to BNN-NEWS.COM - or check the Latvian Version at BNN.LV.

What do some banks have in common with some attorneys? You can trust neither of them. In the banking business we see this in Krajbanka collapse, dragging down also the bank’s professional reputation. The portal www.pietiek.com informs about another case, which could lead to a similar outcome, but in the profession of an attorney.

Latvian Council of Sworn Advocates (CSA) will decide on Tuesday, December 6, whether to launch a disciplinary action against the sworn attorney Martins Kveps. The case could round up with Kveps being excluded from the circles of sworn attorneys, CSA Chairwoman Guna Kaminksa told Pietiek.com.

Kveps is reproached for failure to comply with the client’s interests and conflict of interest. The CSA has already asked an explanation from Kveps, while the attorney himself refused any comments to Pietiek.

The complaint was submitted on November 11 by the potash company Kālija parks, which stresses that back in April 2010 Kveps pretended to represent their interests. Thus, he tricked Kalija parks into signing an unadvantageous contract with the security company TM security. Based on these unadvantageous conditions, TM security is now claiming the Ventspils transit company’s insolvency. Kalija parks instead claims that it has evidence to prove that Kveps is in a conflict of interest, because he represents also TM security.

The whole story stems from April 2010, when Kalija parks slipped out of millionaire Oleg Stepanov’s hands and was taken over by the Swiss lawyer Rudolf Meroni. This was followed by attempts to keep the company with the help of TM security – just like in the case of AS Ventbunkers.

Kveps, who is linked with the interests of Stepanov, was then representing AS Kalija parks majority shareholders. He talked the company into signing a contract with the security company TM security. Kveps promised that the contract will be in force only for a single day – the one of the shareholders meeting. Actually, the contract remained in force and TM security employees stayed in the territory of Kalija parks despite the management’s objections. The contract developed by Kveps foresees that Kalija parks has to pay 25% of the total sum for each delayed daily payment. Similalry, Kalija parks is supposed to pay TM security a 100 000 lats compensation if the agreement is terminated.

The severe contractual conditions are not the only reasons why Kalija parks claims that the sworn attorney actually worked in the interests of the other party. “It is possible to conclude from SIA TM security’s words to AS Kalija parks that “Mr. Kveps will take care of everything”, as well as the severe conditions that Kveps acted in the interests of SIA TM security. Thus, not only did he ignore AS Kalija parks‘ interests, but also allowed the conflict of interest to enter his professional work,” it is said in AS Kalija parks‘ complaint to the Council of Sworn Advocates. What is meant here is TM security board member Markes Varnelis’ statement that “Mr. Kveps will take care of everything.”

“On April 29, 2010, Kveps was considered to be a sworn attorney working in the interests of AS Kalija parks, not providing legal assistance to SIA TM security. Only later it became known that Kveps had made ill use of trust in order to carry out other interests. He provided AS Kalija parks with misleading and false information, so that its board members would act without checking his words and in the interests of the third party represented by him,” it is said in the complaint that the CSA is about to review on December 6.

The complainants believe that Kveps’ “professional activities are violating the key principles of ethics. They dishonour not only him alone, but also cast the shadow of distrust to the profession of lawyer as such.” Therefore, the Kalija parks is asking the CSA to launch disciplinary action against Kveps on the grounds of “blunt violation of ethical norms in his professional work.” Kalija parks urges the CSA to dismiss Kveps from fulfilling the duties of a sworn attorney. According to the company, it is an appropriate punishment, because, given the attorney’s violations, he could be imposed the most severe punishment – exclusion from circles of sworn attorneys.

BNN received an e-mail the other day: “Dear Sirs! To me BNN is like a tribune. A tribune that asks the questions some influential people would rather not reveal to the general public. Some of the questions asked cover the so called “transit wars”. I am deeply concerned about the upcoming “assault” of an enterprise that so far courageously held off the “Ventspils Commandant”. I would appreciate if you would kindly publish my opinion on this matter.” BNN kindly does what our reader asks.

Some people are familiar with the classic Business capture scheme of the early 90s from detective stories, some from detective serials on TV: bulky lads in wearing sportswear persistently offered their protection services for an ungodly amount of money to an owner of a small shop, or stall. And after the debt for “security services” grew equal to the value of the enterprise altogether, the “friendly” protectors claimed ownership over it and transformed from regular criminals into – respected businessmen.

This little scheme is what comes to mind when you’re reading reports in press about probable insolvency declaration of the largest mineral fertilizer transit terminal in Europe, the second in the world – “Kālija parks”. Even though the “protectors” have long since traded in their sports trousers for some expensive suits, even though the year round revenue of the “small shop” is accounted in six digit sums, even though the scales of pulling off something like this is hardly easy; you still accurately notice that familiar pattern.

Furthermore BNN reports that:

So, the lawsuit about declaring that company insolvent came from the «ТМ Security» security firm (the same «ТМ Security» that hit the spotlight in 2010 during dramatic events around “Ventbunkers”.The ones where police were forced to neutralize a number of «ТМ Security» employees, so that the owners of “Ventbunkers” would finally be able to access their administrative building).

You’d think who cares about some dispute between some millionaires, over “who” owns “what”? So what some high ranking VIP bark on and on at each other and unleash their “hounds” with guns and lawyers with their convoluted claims? …How does this involve rest of the people in Latvia?

Let’s not haste to judge. The time to put a squeeze on “Kālija parks” couldn’t have been chosen any better. The company is now engaged in negotiations with prospective partners, and the latter may prove to be sensitive to that kind of scandals. And if the contracts are not signed – instead of a false, provocative bankruptcy, a very real bankruptcy might occur. And then, about 200 employees maintaining the terminal, employees of the businesses working in cooperation with “Kālija parks” – will end up out on the street. Consequences for Ventspils will be great, for Latvia – catastrophic.

The reputation of Latvia as a reliable transit corridor could suffer the most. A country where a small security firm can effectively paralyze the work of one of the largest enterprises in its field of business, a country where raider activity has become a profitable business, a country where bulky men in masks take active part in ownership disputes – does not sound like a good place where to start your business. Transit terminals in our neighbor countries wait in line for fertilizer supplies from Russia. And why not? Russian businessmen can choose either Lithuanian or Estonian ports for transit. The story behind the reduction of freight turnover for the last decade or so in Ventspils reflects this perfectly.

The fall of one large enterprise because of some criminal showdown can cause a chain reaction. And that would cease being a problem for one city it would become a problem for the whole country. Do the people behind the “Kālija parks” bankruptcy claims understand this? I’m sure they do, even better than we do in fact! However putting the remains of a ruined transit business in their pockets is far more profitable than letting that said business to function normally, but not under their control.

As the saying goes, I suppose, “If I don’t get some – no one does!”

P.S. on behalf of BNN: according to our internal rules, our news agency does not publish the names of the authors of the articles. The information about the author is stored in our editorial.

We can add only the fact that “Kālija parks” actively challenges the existence of any debts to both «ТМ Security» and Martins Kveps in both the Regional Court of Kurzeme and the Supreme Court of Latvia. On the 14 of December the Supreme Court of Latvia will review the claims made by “Kālija parks”. «ТМ Security» on the other hand, acting like it does not notice these claims, has initiated a case at the Regional Court of Kurzeme. It also seems that judge Lucava, even having access to the judicial system database, paid no attention to the core of the problem and initiated the “Kālija parks” insolvency process. And doing so unknowingly created an obstacle. In accordance with the Latvian legislation system an insolvency process cannot be used in a case involving debt return.

Even though the employees of «ТМ Security» joined the ranks of Zatler’s Party of Reforms, even though they claim to respect Latvian laws – reality is that «ТМ Security» shows its contempt for the law quite clearly.

Read the full article about VITOL in Baltic News Network.

The Baltic News Network published the following article on June 9th, 2011.

The Baltic Association of Transport and Logistics (BATL) warns Ventspils Free port administration’s activities against AS Ventspils Grain Terminal clearly suggest once more the changes are necessary within Ventspils Free port administration.
Kazakh investors own 100% of AS Ventspils Grain Terminal, which is a perspective project to strengthen the economic relations between Latvia and Kazakhstan. If the project was implemented successfully, it would be a signal also for other investors to place financial resources in the Latvian economy. The association agrees to Economy Minister Artis Kampars description of Ventspils Free Port activities – irresponsible, mismanaged and anti-governmental, according to BATL statement.

BATL, which is made up by the leading companies operating in Ventspils Free Port, point out they are forced to deal with the methods of its administration and its arbitrary, economically ungrounded and different decisions regarding a number of companies.

Similalry, BATL also stresses the port has turned into a private company run by a small number of individuals and its key aim is no longer to develop the port but to lobby «their» companies and harm others.

Consequently, the-once-famous free port is now lagging behind almost all ports along the eastern cost of the Baltic Sea.

Back in mid 1990s, Ventspils Free Port handled almost as much as Saint Petersburg, Tallinn, Riga, Liepaja and Klaipeda ports, while now each of these ports handles much more than Ventpils.

This clearly calls for intervention of the state, as it is a matter of the responsibility of the state and international reputation, thus, BATL will turn to the Latvian Saeima and Cabinet of Ministers asking to arrange the legislation in terms of Ventspils Free Port, according to the association.

You may read this article in the Baltic News Network in the following languages:

Latvian: BALT: Ventspils brīvostas pārvalde lobē savus uzņēmumus, nevis valsts intereses

Russian: BATL: правление Вентспилсского порта лоббирует свои интересы

English: BATL – Ventspils Free Port lobbies its companies instead of Latvia’s interests