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According to information that hasn't been officially confirmed, the former government set the minimum selling price of the block at around 200 million litas ($50 million), with the state assuming no extra obligations.
"We are not satisfied with the terms of the privatization agreed upon by the government," the government's press service said in a statement on Dec. 13.
Members of the new Cabinet said they saw Estonia's Hansapank, the only bidder to acquire the stake in the savings bank, as an acceptable partner for further negotiations. Officials said the government was interested in bringing the bank's privatization process to an end as soon as possible and expressed their hope that a better price for the stake could be obtained.
Government officials pointed out violations of sell-off principles while negotiating for success and failure fees with privatization advisers as well as certain international business ethics rules.
Although it was planned that funding for services provided by the British investment bank DAIWA, chosen as a privatization adviser, would come from the PHARE program, the Lithuanian State Property Fund signed another agreement with DAIWA, committing itself to pay the adviser a success fee amounting to 2 percent of the sum of money received for the savings bank's shares. In case the deal should break down, the state property fund would pay $626,000 for consultation services.
"It is internationally-accepted practice that a success fee is paid to advisers by the buying side, rather than the selling side," according to the statement.
Officials in charge of the Taupomasis Bankas privatization process could not but be aware of the fact that the international auditors' firm Arthur Andersen was providing consultations services to the sellers, i.e. LTB and the state property fund, and Hansapank at the same time, an apparent violation of international business ethics.