Verdict on Latvijas Balzams claim expected soon

  • 2005-10-05
  • From wire reports
VILNIUS - The Vilnius Regional Court has completed considerations of a claim lodged by Latvijas Balzams against the State Property Fund for disallowing the Latvian distiller into a major privatization.

Sarunas Rackauskas, a court judge, said the ruling would be announced Oct. 13.

Latvijas Balzams, which was excluded from the sale of Stumbras, Lithuania's largest distiller, for lack of ownership transparency, has valued the damage to its business reputation at almost 3 million litas (870,000 euros), the Baltic News Service reported, citing unofficial sources.

Latvijas Balzams has also allegedly demanded that Lithuania should reimburse over 1 million litas in company expenses, incurred with respect to the Stumbras privatization.

The proceedings in the dispute - Latvijas Balzams vs. State Property Fund - were closed.

Latvijas Balzams, controlled by S.P.I. Distilleries, addressed the court over the suspension of Stumbras' privatization after the State Property Fund had erased the company from its list of bidders. The grounds for such a move was the Latvian company's unreliability, as evidenced by competent Lithuanian law and order institutions.

Latvijas Balzams offered 158 million litas (45.8 million euros) for the 91.95 percent stake in Stumbras, or 6 million litas more than Mineraliniai Vandenys, a company of the MG Baltic concern that was subsequently declared winner of the public tender in October 2003. It currently owns 99.3 percent of Stumbras.

Lithuania's government and privatization authorities have been accused in the past of favoring their own companies over foreign investors.

Likewise, Eesti Energia, Estonia's monopoly utility company, was suddenly excluded from the bidding for Lithuania's western power grid even though the company's bid application had been accepted and the firm had gone to considerable expense to make the bid.