Unfazed by investigation, Kempmayer boosts capital

  • 2004-07-01
  • From wire reports
RIGA - Despite months of litigation and being hounded by the press last year in connection with the much-maligned digital TV project, U.K.-based Kempmayer Media has boosted capital in a move to continue work on the lucrative project.

Kempmayer Media increased the registered capital of its local subsidiary, Kempmayer Media Latvia, from 100,000 lats to 1.72 million lats (2.6 million euros) on June 22. The entire increase has been fully paid.
Pavils Raudonis, Kempmayer Media Latvia's PR project manager, said that the capital boost was made "to carry out all requirements of Latvian legislation." "Companies not actively in business must prove that they are ready to continue working," he said.
The capital increase was reportedly carried out so that the company would be ready to implement its contractual responsibilities once litigation over the Latvian digital television project ends.
"The registered capital has been boosted so that we can work as soon as we can work," said Raudonis, adding that the company was ready to continue implementation of the digital television project.
However, he could not say how long the international legal case against Kempmayer would last.
He added that digital television needed the equipment currently mothballed in customs warehouses and that was "depreciating every day." The equipment is supposed to be used in rooms with temperature control, but this is not being done at the warehouses, said Raudonis.
The digital television project underwent severe criticism from the previous government of Prime Minister Einars Repse last summer and was halted. The state owned Digital Latvia Radio and Television Center filed a claim against Kempmayer Media Latvia at the Stockholm International Court of Arbitration challenging a contract signed between the two in late 2002 on the introduction of digital television in Latvia.
The Corruption Prevention and Control Bureau also launched a criminal case involving the matter last year.
The value of the aforementioned agreement and resulting cooperation could have reached up to $100 million. Kempmayer also filed a counterclaim against the center.
Also, the competition council ruled last month that the contract should be considered noneffective as of day one, as it expected Kempmayer to supply Latvia with 800,000 digital television receivers, equal to the number of households in Latvia.