Aboltina critical of Riga Council

RIGA - Saeima Chairwoman Solvita Aboltina (Unity) says she does not plan to retract her statements made on Dec. 3 about the Riga City Council, Riga Mayor Nils Usakovs (Harmony Center) and their misguided investment strategy of putting taxpayer money into an uninsured account in Latvijas Krajbanka, reports LETA.
Usakovs challenged Aboltina to either “lend proof to, or retract, her statements about Riga City Council’s deposits in Latvijas Krajbanka and about Usakovs’ meetings with the former head of Snoras bank, Vladimir Antonov,” said Usakovs’ press secretary Anna Kononova.

Gunda Reire, head of Aboltina’s office, said that Aboltina would not retract her statements, and that further information would be released after she receives Riga City Council’s letter protesting her statements.
Aboltina said that the interest rate received on the Riga City Council’s 10 million lats (14.2 million euro) deposit in Krajbanka was unfavorable for the municipality. She also claimed that she had seen Usakovs together with Antonov during the New Wave pop music festival, which would raise questions about the municipality’s deposit in the bank and any possible impropriety by the mayor.

Riga City Council appears to have done little in the way of risk analysis on Latvijas Krajbanka, or in the safety of depositing funds with it.
Kononova claims that Riga City Council had deposited money in Krajbanka as the bank was offering the highest interest rates on deposits as compared to other commercial banks.
Chasing high returns, though, as many financial analysts consider, is a recipe for disaster and not a prudent strategy for an office such as Riga Council. There is usually a reason for the high returns, namely, that the bank may be in trouble and is desperate to attract funds.

Usakovs’ press secretary also noted that the mayor was receiving treatment in a hospital in Berlin last summer after a running mishap at a marathon, therefore he did not attend any of the events organized during the New Wave music contest, nor had he met with Antonov before that.
Riga City Council has deposits of 10 million lats in Krajbanka, whose operations were halted by the Financial and Capital Market Commission after 200 million lats was discovered missing. It is quite likely that the council will lose this money if the bank is ruled insolvent.

The Riga Regional Court decided on Dec. 2 to postpone the review of the Financial and Capital Market Commission’s petition, claiming that Latvijas Krajbanka be ruled insolvent, until Dec. 27. The court said that the petition could not be accepted as several documents submitted by the Commission had to be rewritten pursuant to the Civil Procedure Law requirements, the court’s press secretary Aigars Berzins said.