VILNIUS – The whole Baltic stock market might be affected after Lithuanian prosecutors launched an investigation on Tuesday into suspicions that Lithuanian paper producer Grigeo's subsidiary in Klaipeda released untreated wastewater into the Curonian Lagoon, Zygimantas Mauricas, chief economist at Luminor bank, believes.
He compared the situation with the recent money laundering scandal in Estonia when reputational damage was done to the whole Baltic banking sector. In his words, investors view the Baltic countries as a single region.
"In terms of reputation, with no doubt, damage has already been done, and not only for the company (Grigeo – BNS) itself, but for the whole stock market and not only that of Lithuania but of the whole Baltic region," Mauricas told BNS.
Local residents have complained over possible pollution from Grigeo Klaipeda for some time already, and Klaipeda Mayor Vytautas Grubliauskas told BNS on Tuesday the company has been among several companies suspected of pollution for a long time. Mauricas says the problem is that services often ignore residents' complaints.
"There are several reasons. The first is that institutions often ignore residents' complaints. There's a general attitude in Lithuania to barely respond to such complaints," the Luminor analyst said. "Second, if they do get attention, measures are not taken for various reasons. Who could deny corruption is not involved?"
Prosecutors launched an investigation into suspected pollution of the Curonian lagoon by Grigeo Klaipeda on Tuesday. Gintautas Pangonis, president and major shareholder at Lithuanian paper and wood industry group Grigeo, said earlier wastewater could have been released into the Curonian Lagoon due to a breakdown, not intentionally.
Prosecutors, however, suspect the equipment for releasing untreated wastewater into the Curonian Lagoon was installed intentionally.
Grigeo said on Wednesday the situation would not have significant impact on the group's activity and results.
Prosecutors suspect the Curonian Lagoon could have been polluted for a long time, thus, damage to nature would be valued in millions.
The Nasdaq Vilnius Stock Exchange on Tuesday suspended trading in Grigeo shares following reports that prosecutors had launched a pre-trial investigation after its shares plunged more than 9 percent.