State accused of rushing deal with TeliaSonera

  • 2004-03-04
  • From wire reports
RIGA - The governmental working group charged with developing Latvia's position in its litigation case against TeliaSonera, the Scandinavian concern that owns 49 percent of Lattelekom, announced last week that it had defined the state's stance in its settlement talks with the telecommunication company.

Several high-ranking officials, meanwhile, criticized the outgoing government of Prime Minister Einars Repse for hastily putting together a deal.
Details of the state's proposal, which was finalized on Feb. 26, were not released, and Viesturs Sutko, a member of the working group and an adviser to Repse, cited the confidentiality status of the case, saying only that the working group had made a decision designed with a specific result in mind.
According to unofficial reports, however, the working group has proposed that the two sides in the dispute agree to an unconditional settlement, with TeliaSonera retaining the priority right to buy the state's controlling stake in Lattelekom.
A final decision, though, is to be made by the government, and according to reports the government was scheduled to discuss it at its weekly meeting on March 2.
Working group members Justice Minister Aivars Akse-noks and Local Municipalities Minister Ivars Gaters, who also is acting economy minister, also re-fused to reveal the work group's decision.
The co-owners of Lattelekom - the state, which holds 51 percent, and TeliaSonera, which holds 49 percent - have been litigating due to Latvia's decision to reduce Lattelekom's monopoly period by 10 years due to EU accession. For its part the government hit back TeliaSonera with a suit claiming that the investor failed to meet its investment obligations.
The parties launched settlements talks early this year after Repse sent a proposal to the company at the end of last year.
The claim against Latvia amounts to 80 million lats (119 million euros), while the government's counterclaim amounts to 600 million lats.
Politicians - including Transport Minister Roberts Zile - have expressed doubts about the haste with which the outgoing government was trying to conclude a deal. Guntars Kokorevics, head of the Riga Stock Exchange, was quoted as saying that he believed that Latvia would not require TeliaSonera to give up its priority right. As a result, "we will never learn the best price for the state-owned holding of Lattelekom, and possibly the privatization of Lattelekom shares will have to be repeated," Kokorevics said.