TALLINN - Prosecutors have started a criminal investigation against a former executive of Werol, a state-owned rapeseed refinery, claiming he is responsible for the company's significant financial loss last year.
According to investigators, former board member Erki Aavik overstepped the powers he received from the company's council when he purchased rapeseed from farmers. Spokespeople for Werol said that Aavik was being accused of having bought 44,000 tons more rapeseed than allowed by the council, which resulted in the company ending 2004 some 42 million kroons (2.56 million euros) in the red.
Werol is under threat of bankruptcy proceedings arising from a claim by Biodiesel.
Biodiesel is claiming almost 141 million kroons from Werol. The latter decided to pull out of a 10-year cooperation agreement in August.
According to Heino Harak, owner and supervisory chairman of Biodiesel, Werol's decision thwarted Biodiesel's plans, and the agreement allows the firm to claim a fine equal to two months' output at full capacity.
Werol has struck back, filing a petition against Biodiesel. Company managers are claiming that Biodiesel filed an ungrounded and malicious claim.
Werol informed Biodiesel that it does not recognize the claim. In addition, the rape oil producer said it would sue Biodiesel to claim material and nonmaterial damages if Biodiesel filed an ungrounded bankruptcy petition.
Earlier this year, the Agriculture Ministry said it was preparing to privatize a majority stake in Werol. Yet Indrek Grusdam, senior aide to the permanent secretary of the Agriculture Ministry, told the Aripaev business daily last week that the state may give up the plan.
The Agriculture Ministry is at present preparing the sale of the majority stake in Werol, hoping to earn 10 's 20 million kroons from the deal.
Meanwhile, bankruptcy proceedings against Werol have begun in the Jogeva country court. Judge Zakaria Nemsitsveridze told the Baltic News Service that he appointed a barrister as provisional bankruptcy trustee. The barrister will give the court an overview of the firm's economic situation.
The court will decide on the basis of the trustee's report whether or not the firm is bankrupt.
The state owns 98 percent of Werol Tehased. The firm produces 25,500 tons of rape oil annually. Werol's sales exceeded 500 million kroons in 2004.