RIGA - A regional administrative court has agreed to hear a complaint from a Ventspils stevedore firm over the legality of a recent deal in which a large stake in an oil transit company is set to be sold to a foreign investor. Ventbunkers filed the complaint after Ventspils Nafta, a multi-profile business group, agreed to sell a 49 percent stake in Ventspils Naftas Terminals, an oil handler, to Euromin Holdings.
In the opinion of Ventbunkers, the sale, which was approved by competition authorities but has yet to be finalized, is illegal since Ventspils Nafta did not inform Ventbunkers of the deal and the deal itself violated competition rules.
Ventbunkers owns a 51.9 percent stake in Latvijas Naftas Tranzits, which in turn owns 49 percent of Ventspils Nafta, making it the single largest shareholder in the conglomerate, whose interests include cargo handling, shipping and media.
Prior to the deal, Ventspils Nafta owned 100 percent of VNT.
Under the transaction, Euromin Holdings, a Cyprus-registered subsidiary of the Vitol Group, will acquire a 49 percent stake in VNT, while Ventspils Nafta will retain 51 percent.
VNT was created in 2003 specifically to attract an investor who would help revive oil flows to and from Ventspils, Latvia's largest port and the second largest in the Baltic states.
According to a statement released by Ventbunkers, the appeal was based on serious violations of the competition law, factual errors, as well as a departure from the accepted decision-making practice in similar cases.
A court official said the Latvian Competition Council would have to submit an explanation to the court, after which the court would set a date for a hearing.
Ventbunkers also said that the competition watchdog should ensure competition and prevent companies from gaining or strengthening a dominant position on the market.
The Competition Council ignored the fact that in 2006 there were three companies handling oil products at Ventspils Port 's Ventbunkers, Ventall Terminals and VNT, and the council has not considered any of the circumstances concerning possible consequences that the merger might cause to other companies involved in the oil handling business, Ventbunkers said.
According to Ventbunkers, the deal "would cripple the oil handling market by reducing competition in the interests of some market players, which is a clear violation of the competition law."