Leo LT under fire

  • 2009-01-21
  • By TBT staff and wire reports

FROZEN: Leo LT cannot operate without government approval.

VILNIUS - Leo LT, the majority state-owned energy company, has come under fire from all angles with the Prime Minister and Minister for Energy asking questions of the private minority shareholders and management amid a Constitutional Court case to determine whether the company was formed legally or not.
Prime Minister Andrius Kubulius said his government intends to radically reform the energy sector and mentioned the need to curb the interests of business tycoons in the industry.

"I must say that in energy matters, we see the need for major changes, and first of all in ensuring proper representation of public interests," Kubilius said at a news conference.
Lithuania's Economy Minister Dainius Kreivys has also expressed doubts about the latest operating strategy of Leo LT.

"The working materials produced left many questions unanswered," a ministry statement quoted the minister as saying after the meeting with executives of Leo LT.
The strategy should be more focused on boosting the efficiency of the whole electricity generation, supply and distribution chain, Kreivys said.
"The interests of consumers have not been considered in the materials produced. Moreover, they failed to consider the findings of the National Audit Office as to the justification of energy prices," the statement quoted Kreivys as saying.

Arvydas Sekmokas, the leading candidate for the soon to be created Energy Ministry, was not available for comment as TBT went to press.
NDX Energija holds a 38.3 percent stake of Leo LT, with the government controlling the rest of the shares.
Kubulius said that NDX Energija's owners, VP Grupe, which also owns Maxima Grupe and other retail chains, are feeling nervous.

"We can see some nervous behavior by some of the big oligarch groups, especially those related to the energy sector, because our steps in the past month toward bringing more transparency to energy matters are causing great worry to them," Kubilius said.
Without naming VP Grupe specifically, the Prime Minister didn't deny that those "oligarch groups" included the owners of the minority shareholder of the national energy company Leo LT.
Kreivys' press representative told TBT that the minister was concerned about the financial considerations in the company's documents.

The company focused on the policy of long-term tariffs when discussing the sources of financing for its projects, the ministry said in a statement.
After reviewing the operating strategy of Leo LT, the Economy Ministry will submit preliminary conclusions to the Prime Minister. Kubilius demanded in late December that the board of the company work out a strategic plan of short, mid and long-term actions reflecting, inter alia, the company's policy on electricity rates.

Lithuania's Constitutional Court has adjourned the hearing in the case concerning the legality of establishing the national investor company Leo LT to Jan. 27.
The formation of the company came under fire in the run up to the general elections after anti-corruption experts questioned the transparency of the deal.

New circumstances were revealed during the inquiry of experts, which made it necessary to question other experts and obtain additional documents, the court said in a statement.
Ramune Sakalauskaite, the court's spokeswoman, told TBT that the reasons for the delay and the details of the case are not available to the public, but would be revealed after Jan. 27 when the case is to be heard.
The parliament asked the court to examine the compliance of legislation, which set ground for the establishment of Leo LT, with the Constitution last fall.