Brazauskas faces trial in non-transparent privatization case

  • 2006-11-01
  • By Arturas Racas

DONE DEAL: Former PM Brazauskas (right) met with PM Veselka (left) earlier this year at a roundtable discussion on the Alita privatization.

VILNIUS - Former Prime Minister Algirdas Brazauskas faces the unpleasant prospect of standing trial for his role in a non-transparent privatization, which allegedly caused millions of litas of damage to the country. Brazauskas, who chairs the Social Democrat party, will be accompanied in court by fellow party member Petras Cesna, who was also allegedly involved in the crime.

In June 2005, Parliament set up a special parliamentary commission to investigate the 2004 privatization of the state-owned Alita alcohol company.
According to the commission's report, which was approved by Parliament on Oct. 26, Brazauskas, who led the government at the time, and Cesna, then head of the Economy Ministry, are guilty of signing documents that approved the non-transparent privatization of Alita.

The commission alleges that the privatization of the alcohol company violated the law, and caused approximately 36 million litas (10.4 million euros) in damage to the state.
Among those responsible for the non-transparent deal, the commission concluded, are former State Property Fund Povilas director MiIasauskas, board members of the State Property Fund and members of the privatization commission. .
A consortium established by Alita's management and headed by company director Vytautas Junevicius purchased an 83.8 percent stake in the alcohol company for 57.05 million litas.

However, the consortium was granted the right to purchase the alcohol company only after the official winner of Alita's public tender, Italian businessman Luigiterzo Bosca, was removed from the competition by Lithuania's main privatization body, the State Property Fund. Bosca had offered 92.2 million litas for the stake and 15 million litas in investment.
According to the Fund, Bosca was eliminated from the tender because he "missed the term to initiate the sale and purchase agreement." It was later decided that Bosca's tender should not have been terminated, but the stake in Alita had already been offered to the Junevicius-led consortium for a lower bid. The decision was officially made when two other participants withdrew from the tender.

Although questioned by politicians and prosecutors, the privatization commission, the Economy Ministry and the government okayed the deal.
Bosca, however, appealed the State Property Fund's decision, and after almost three-years of litigation, celebrated a victory.
On Oct. 11, the Lithuanian Supreme Court ruled without appeal that Bosca's removal from the Alita privatization tender was unfounded, and ordered the State Property Fund to pay the Italian businessman 1.7 million litas in damages and court expenses.

The court's decision accelerated the parliamentary commission's conclusions, and they directly accused the State Property Fund and the government of wrong doing.
"The government possessed all documents prepared by the Special Investigation Service and Office of the Prosecutor General which proved that the privatization had been conducted against the law…. It knew everything and made a final decision," Jonas Pinskus, chairman of the special parliamentary commission, told journalists after their conclusions had been approved.
He believes that those responsible for the damages must face the due consequences, including financial compensation.
Alita is situated in Lithuania's southern city Alytus and famous for its production of Lithuanian sparkling wine (which in Soviet times was called "champagne") and brandy.