Auditors cast doubt over SAPARD aid granted to two firms

  • 2005-05-11
  • From wire reports
VILNIUS - The National Audit Office has expressed doubts about the legality of EU assistance granted to two Lithuanian companies, one of which is linked with Economy Minister Viktor Uspaskich. Should the European Commission decide that the companies are not entitled to assistance, which was dispersed under the SAPARD program, the money will have to be returned.

Auditor General Rasa Budbergyte said, after a May 6 meeting with President Valdas Adamkus, that the audit office had doubts about SAPARD assistance to Kauno Grudai, a grain processing company, and Krekenavos Agrofirma, a meat processor.

In particular, auditors had pinpointed some 2 million litas (600,000 euros) granted to Kauno Grudai and about 8 million litas extended to Krekenavos Agrofirma, Budbergyte added.

The National Audit Office, which assessed the procedures on granting assistance to the above companies, disclosed several violations, including of a provision governing the amount of financial assistance granted to companies. Auditors said it far exceeded the amounts the two companies had been entitled to.

The other violation involved the requirement to provide assistance to one company per project, and the allocation of assistance might contradict the provisions of a multi-annual funding agreement between Lithuania's government and the EC. In the auditors' opinion, Krekenavos Agrofirma and Krekenavos Mesa are associated companies but received assistance as separate ones.

Krekenavos Mesa, a meat processing company, is linked with Economy Minister Viktor Uspaskich, who made his fortune selling pickled vegetables.

Krekenavos Agrofirma once had MP Alfredas Pekeliunas, a member of the Union of Farmers' Party and New Democracy Party, as its chief executive officer.

Kauno Grudai is managed by Tautvydas Barstys, a former supporter of impeached President Rolandas Paksas.

A report on allocation of assistance worked out by the National Audit Office will be handed over to the European Commission, which will consider the legality of the allocations by Sept. 30.

In 2004 Lithuania received 207 million litas under the SAPARD program. An additional 70 million litas for the funding of 460 projects were assigned from the national budget.