Parex goes after previous owners

RIGA - Parex Bank and the Latvian Privatization Agency have turned to the courts with a claim against the former Parex shareholders Valerijs Kargins and Viktors Krasovickis for compensation of more than 12 million lats (17.1 million euros) to the LPA, as well as more than 83.7 million lats to the bank, plus a 4.5 million lats contractual penalty, reports Nozare.lv. The total amount of the lawsuit is 99.5 million lats.

This brings the total amount of claims against the former Parex shareholders to over 164 million lats.
The bank and its current majority shareholder, the LPA, have concluded after an analysis of the Nov. 10, 2008 agreement, which served as the basis for the Parex bailout by the state, that several guarantees and testimonies presented by the sellers, that is, Kargins and Krasovickis, were inaccurate and false.

Therefore, Kargins and Krasovickis violated the agreement, which provided that they would be held responsible if false information had been provided about the actual situation at the bank upon the moment of the signing of the agreement. Parex has established that the actual amount of losses that should have been noted in the bank’s balance sheet was larger, by at least 82 million lats as of Oct. 31, 2008, than that indicated by the two majority shareholders.
This was established by a detailed analysis of the circumstances, carried out by the audit company PricewaterhouseCoopers and law offices Eversheds Bitans.

The previous lawsuit that Parex filed against Kargins and Krasovickis, on July 30, 2010, claimed compensation of 65 million lats, giving the resulting total claim at over 164 million lats.
The Latvian state took over Kargins’ and Krasovickis’ shares in Parex on Dec. 5, 2008. currently, the LPA holds 83.07 percent stake in Parex, and the European Bank for Reconstruction and Development holds 13.61 percent.