Backstage pass to Latvia’s privatization deals

  • 2010-09-01
  • Staff and wire reports

RIGA - The privatization of the shipping firm Latvijas kugnieciba (LK) took place openly and no behind-the-scenes games were possible, said People’s Party leader Andris Skele, through his press secretary Romans Melniks, reports news agency LETA. The party leader claimed that LK was one of the rare state-owned companies to have been privatized openly on the stock market, and that the entire process was observed by Transparency International Latvia - Delna.
“Not one LK share was sold in any other way than through an organized auction on the stock exchange. This was the most open way possible of doing this,” exclaimed Skele.

The controversial politician-businessman stressed that many and various people had held discussions about taking part in the auction, but the important thing was only who had actually taken part. “No behind-the-scenes games were possible here,” he added.

These statements are contradicted by material published on Aug. 25 in the new book ‘Ka nozagt miljardu?’ (How to steal a billion), which appears to indicate that the People’s Party leader, president of gas company Itera Latvija, Juris Savickis, the mayor of Ventspils Aivars Lembergs and other figures from the Ventspils business clan prepared for the privatization of the shipping company by holding joint discussions from 2000 up until the privatization was carried out in 2002.

Information on an agreement by the Ventspils and Riga groups to jointly privatize LK has previously appeared from unofficial sources as well as within Lembergs’ ongoing criminal trial; however, the newly-published book features full, signed legal testimonies by a number of people directly involved in the deal, as well as other materials in the possession of the country’s law enforcement institutions, probably taken from the continuing, so-called ‘Lembergs affair.’ This includes testimony provided to the Office of the Prosecutor General by Savickis, businessmen Olafs Berkis and Jurijs Bespalovs, as well as banker Arnolds Laksa.

In his testimony, Savickis admits having business relations with Lembergs in matters connected to the privatization of LK, firstly concerning privatization certificates, and later money.
“We held joint discussions of the main questions; most often there were four of us,” says the Itera Latvija president. The three others were Lembergs, Skele and Berkis. The meetings were held to discuss essential matters during the LK privatization process, for example privatization certificates and financing.

The discussions most often took place on the premises of a legal firm. “When we had made a business decision, the rest was done by technical people - lawyers and so on,” indicates Savickis. The Itera Latvija president notes that “Aivars Lembergs took part in the whole privatization process. All the main questions were agreed with Aivars Lembergs,” indicates Savickis.

At the time when, according to the testimonies of Savickis and Berkis, active preparations for the privatization were taking place, the Ventspils mayor was publicly denying that he wished to take part in the privatization of the shipping company, claiming that the deal was “too insignificant and risky.”

The privatization took place openly, says Lembergs, adding that he had not taken part in any behind-the-scenes dealing. “What kind of behind-the-scenes games could there have been? If someone buys something as a result of an auction, this is the fairest type of privatization,” said Lembergs, stressing that the privatization of LK had taken place through an open auction and he had not taken part in any kind of backstage agreements.

Lembergs claims not to have seen journalist Lato Lapsa’s book, ‘Ka nozagt miljardu?’ Commenting on the appearance of the book, Lembergs joked: “I feel hurt that a book did not come out about me before the last municipal elections. I should think that I deserve that Lato Lapsa write at least one book a year about me.”
Not surprisingly, the mayor of Ventspils expressed his belief that the testimonies published in the book were a fabrication produced for political gain.