Court ruling ordering Latvijas Krajbanka board members to pay EUR 15 million to insolvency administrator comes into force

  • 2020-04-28
  • LETA/TBT Staff

RIGA - Department of Civil Cases of the Supreme Court has turned down an appeal against the Riga Regional Court's ruling ordering the former management board of the now defunct Latvijas Krajbanka to pay EUR 15,366,981 million to the bank’s insolvency administrator KPMG Baltics, the Supreme Court's representative Rasma Zvejniece told LETA.

Therefore the Riga Regional Court's ruling has come into effect.

The appeal had been filed by the former Latvijas Krajbanka board members and their representatives.

Examining the arguments set forth in the appeal, the Supreme Court senators agreed that there were no obvious grounds to consider that the Riga Regional Court's judgment was incorrect and that the case was essential for ensuring uniform legal practice. As a result, there are no grounds for the Supreme Court to accept the appeal.

As reported, in June 2017, the Riga City Vidzeme District Court awarded KPMG Baltics EUR 15 million compensations from the defendants who had reportedly extended loans to companies registered in the Seychelles and Cyprus without sufficient economic grounds.

The ruling of the court of first instance was appealed to Riga Regional Court which upheld the district court’s ruling.

The defendants in the case were seven former members of the Latvijas Krajbanka management board: Ivars Prieditis, 13th Saeima member Martins Bondars, Dzintars Pelcbergs, Martins Zalans, Andrejs Surmacs, Ilze Bagatska and Svetlana Ovcinnikova. TV3 reported last January that the court had arrested Bondars' properties and bank accounts.

On November 21, 2011, the Latvian financial watchdog, the Finance and Capital Market Commission (FCMC) ordered Latvijas Krajbanka to suspend all financial services. The decision was made due to a shortage of assets discovered at the bank, and a criminal investigation was started.

Riga Regional Court declared Latvijas Krajbanka insolvent on December 23, 2011. On May 8, 2012, at the request of KPMG Baltics auditing firm, which had been appointed the insolvency administrator of Latvijas Krajbanka, the court ordered a bankruptcy procedure for the bank. Latvijas Krajbanka's banking license was annulled on May 10, 2012.