State helpless against Liepajas metalurgs shareholders

  • 2013-08-21
  • From wire reports

RIGA - Liepajas metalurgs shareholders are trying to bluff the public into believing that they are trying to rescue the company, Prime Minister Valdis Dombrovskis said in an interview with the LNT television on Aug. 21, reports LETA. By altering the key provisions in the agreement on handing over their Liepajas metalurgs shares to the state, the company’s shareholders have actually torpedoed the agreement, said the prime minister.

The public is left wondering, therefore, as to why the Latvian government hasn’t acted more forcefully, including conducting a criminal investigation with possible jail time for the company’s owners, considering there may have been illegal actions taken by them.

Liepajas metalurgs’ legal protection plan must be confirmed in the coming weeks, said Dombrovskis. He also said that the government had no opportunity to take the company’s shares from the shareholders; some time ago Saeima did review law amendments that would have made this possible, but the process was halted by All for Latvia-For Fatherland and Freedom/LNNK members.

Contrary to earlier reports, Liepajas metalurgs shareholders Sergejs Zaharjins and Ilja Segals have not handed over their shares in the company, Finance Minister Andris Vilks told reporters after the government’s session on Tuesday. The contracts they are offering are “skewed and unacceptable to the state.”

Shareholders play games with government

On Tuesday, the Cabinet ministers heard an updated report on the situation at Liepajas metalurgs, where the actions of Zaharjins and Segals, in refusing to relinquish their shares, were referred to as a “serious obstacle” to implementation of the company’s legal protection plan. Dombrovskis said if Zaharjins and Segals do not hand over their shares in the company, this could block implementation of the legal protection plan.

At the end of this past May, Liepajas metalurgs also released a statement saying that, pursuant to Prudentia Advisers requirements, Zaharjins and Segals had signed an agreement under which they and the company’s third largest shareholder, Kirovs Lipmans, were to hand their shares over to the company’s creditors for 1 lats (1.42 euros) each. However, this information proved to be false - Lipmans did not sign the agreement on selling his shares for 1 lats, whereas Zaharjins and Segals set a number of conditions that were unacceptable to the creditors.

Liepajas metalurgs is struggling with major financial problems, possible criminal activities in its finances, has halted production and work on the company’s legal protection plan is continuing. This past July, the State Treasury repaid from the state budget the principal amount of a loan owed to the Italian bank UniCredit by Liepajas metalurgs in the amount of 67,465,056 euros.