Kargins and Krasovickis to pay the state EUR 124.3 million

RIGA - Former Parex Banka board members Valerijs Kargins and Viktors Krasovickis will have to pay public asset manager Possessor (formerly Latvian privatization Agency) and its subsidiary Reap EUR 124.3 million, the Supreme Court's Department of Civil Cases ruled on Wednesday.

The Civil Cases Department of the Supreme Court today reviewed Kargins and Krasovickis, as well as Posessor, Reap and company Reverta's appeals against Latgale Regional Court's ruling of January 25, 2021, and turned all appeals down. This means that Latgale Regional Court's ruling, which stipulates that the bank's former shareholders must pay EUR 124.3 million to Reap and Possessor, has come into force, LETA learned at the court.

The Supreme Court concluded that there was no reason to believe that the regional court's judgment was incorrect.

As reported, Latgale Regional Court ruled that former shareholders of Parex Bank, Kargins and Krasovickis, should pay EUR 124 million to the state.

In fall 2008, Parex Bank, the second largest bank in Latvia at the time, sought government assistance to stave off financial trouble brought about by the global financial crisis. To support the failing bank, the Latvian government decided to take over Parex Bank from the bank's founders, major shareholders and top executives Valerijs Kargins and Viktors Krasovickis.

The government invested EUR 200 million in the bank, while Kargins and Krasovickis remained in their positions. After signing of the agreement, money continued to flow away from the bank. In total, the government invested EUR 1.7 billion in the bank, EUR 654 million of which have not been recovered.