bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Saturday 24.02.2018 | Name days: Diāna, Dina, Dins
LatviaLatvia

Government urged to declassify Citadele Bank’s sale

FaceBook
Twitter
Draugiem
print
(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUSaeima’s Public Expenditure and Audit Committee has sent a letter to the Cabinet of Ministers, requesting the latter to lift restricted access status on all information related to the sale of Citadele Bank.

This request came after the committee read through the report of the State Audit in regards to the bank’s sale. Members of the committee found that a large portion of information about the entire sale process remains classified and unavailable for the general public.

«Sale of a state bank is an important deal that has and continues influencing the quality of life of all Latvian residents. This is why society has the right to receive full information about the sale of Citadele Bank. Any resident should have an opportunity to assess the benefits of this deal and the responsibility of officials who curated it,» – said the committee’s chairman Andris Berzins.

As BNN had previously reported, selling for the highest possible price had always been a priority in the sale of Citadele Bank. At the same time, conditions previously voiced by the European Commission and European Reconstruction and Development Bank had not been taken into account sufficiently.

Those conditions limited that government’s options in making independent decisions in the bank’s selling process and could influence opinions of potential buyers about the bank’s value, as noted by the State Audit.

As a result of that, the bank’s sale was delayed to the last moment, leaving the state no room to manoeuver to establish favourable conditions for the sale. SA concluded in its report on the sale of state owned capital shares in Citadele Bank.

It was clear at the moment when Parex Bank was taken over that it was an unprecedented act for establishment of financial stability in the country. Knowing the importance of the deal for the country, its size and potential impact on the state budget, the government should have created special rules to govern decision-making processes in relation to the restructuring of Parex Bank, including the sale of Citadele Bank. Instead of that, the government decided to sort out the structure of the deal to comply with regulations stated in the Law on Governance of Capital Shares of a Public Person and Capital Companies, which did not come close to secure accessibility of all necessary tools to ensure realization of state interests, SA noted.

The government’s decision states that the Privatization Agency became the shareholder in Citadele Bank. As time went by, the Privatization Agency made no decisions in relation to the bank’s sale process. Moreover – board members were provided with guarantee contracts that provided for the compensation of any losses from the state side should the losses arise. The government made all conceptual decisions in relation to the bank’s sale process. The Privatization Agency served as a mailbox between the government and associated consultants. The latter were the ones to develop solutions for the government’s decisions. Ministries provided no opinions on the deal. Opinions provided by the Bank of Latvia were not taken into account for inexplicable reasons, as concluded by SA.

Auditors believe the sale of Citadele Bank provided Privatization Agency with EUR 74.7 million. Nothing of this amount was left for the state budget, because EUR 76.97 million, the amount that exceeded the EUR 74.7 million received as a result of the sale, was paid to the European Reconstruction and Development Bank.

The Privatization Agency’s realized management of Parex Bank’s restructuring, including the formation of Citadele Bank’s and its sale resulted in the state being paid at least EUR 6.5 million. EUR 5.5 million of this amount was paid to consultants. The Privatization Agency could not provide a report on the use of the remaining EUR 1 million, SA reported.

«Why is it possible to conclude that the state could have earned more? First of all, based on conclusions made by multiple independent experts, the bank’s value was 25 to 75 million euros higher that the selling price. Secondly, selling the bank at the last moment put the government in a situation when it was no longer possible to defend Latvia’s interests. To complete the deal within terms coordinated with the European Committee and realize commitments stated in cooperation agreements compiled by the European Reconstruction and Development Bank, it was necessary to accept conditions put forward by partners without questions. The State Audit also had an opportunity to learn that among contenders were also investors who offered higher prices. Nevertheless, to preserve reputation, the government should have assessed the price in accordance with other condition. Had all of those factors been taken into account, with the sales strategy planned in advance, it is possible that it would have been possible to sell the bank without delaying the sale process,» – SA reported.

The sale of Citadele Bank is not the only example of a large-scale national deal that does not provide confidence about sufficient protection of state interests. Other examples include Liepājas Metalurgs, airBaltic and upcoming decisions in regards to the future of state owned shares in Lattelecom, LMT, Rail Baltica and other matters that not only impact the national economy, but also require considerable financial investments, the State Audit notes, hoping conclusions made in the report will be taken into account and help prevent any future mistakes of that kind.

Ref: 102.109.5778


Leave a reply

Baltic States ask European Commission to maintain EU Cohesion Fund financially strong

Baltic finance minister ask the European Commission to keep the European Union’s Cohesion Policy financially strong and aim it towards results, BNN was told by Finance Ministry.

Police commence investigation on possible money laundering schemes at ABLV Bank

Latvia’s State Police has commenced an investigation about the possible money laundering operations at ABLV Bank, which were reported by Financial Crimes Enforcement Network (FinCEN) US Department of Treasury.

S&P Global affirms Latvia’s credit rating at «A-»

On Thursday, 22 February, S&P Global reaffirmed Latvia’s credit rating on the «A-» level, retaining a positive outlook for the future, as BNN was informed by the State Treasury.

Kristovskis: state officials should be equally strict to Lembergs and Rimšēvičs

«Lack of consistency – such a conclusion appears after looking at the behaviour of state officials in regards to their request for Ilmārs Rimšēvičs’ to step down as governor of the Bank of Latvia,» says Ventspils City Council member Ģirts Valdis Kristovskis.

LSRTC: Zaķusala TV Tower’s reconstruction will cost several dozen million euros

According to chairman of Latvia’s State Radio and Television Centre (LSRTC) Jānis Bokta, reconstruction of Zaķusala TV Tower will cost several dozen million euros.

Trade union worried teachers may not have time to prepare for new education content

Teachers may not have enough time to prepare to work with new education content, said manager of Latvian Education and Science Workers' Union Inga Vanaga in an interview to Rīta Panorāma programme of LTV.

Judins, Loskutovs, Čigāne and Dālderis to continue working in Unity’s faction

Saeima members Andrejs Judins, Aleksejs Loskutovs, Lolita Čigāne and Ints Dālderis will continue working in Unity’s faction and coalition.

Saeima supports member’s proposal to publish wages of Bank of Latvia employees

Latvia’s parliament has decided to support Ints Dālderis’ proposal to publish wages paid to employees of the Bank of Latvia, education institutions, as well as municipal capital associations.

More snow expected on weekends; air temperature to drop even more next week

On the night to Friday, 23 February, air temperature in most of Latvia declined to -21° C… -27° C. It was only warmer in Kurzeme and some parts of Vidzeme, as reported by Latvia’s State Environment, Geology and Meteorology Centre.

SEB Bank: more employment options will open up and workers will become more selective

«It is becoming easier to change jobs nowadays. The largest selection of employment options are found in regional centres and cities, especially Riga and Pieriga. We see fewer employment options in regions even though there is still considerable demand for workers there,» predicts SEB Bank’s macroeconomics expert Dainis Gašpuitis.

ABLV Bank’s manager claims the bank is ready for cancellation of payment restrictions

ABLV Bank is ready for cancellation of payment restrictions, said the bank’s chairman Ernests Bernis during a press-conference on Thursday, 22 February.

62.9% of Latvia’s population was employed in 2017

Compared to the year before, in 2017 employment rate grew by 1.3 percentage points and number of employed persons by 1.5 thousand. Employment rate among men grew faster than among women – by 1.6 percentage points and 1.0 percentage points, respectively. 894.8 thousand people or 62.9 % of Latvia population aged 15–74 were employed in 2017.

Lithuania and Latvia: the tale between two sisters marked with rivalry

Relations between Lithuania and Latvia, two tight-knit Baltic neighbours, may exemplify a sisterly relationship from the first sight, but just over the course of a single week, several pings rang, signalling that rivalry is, and has always been, a component of coexistence.

Lembergs unable to organize his private life because of intense court proceedings

Lembergs unable to organize his private life because of intense court proceedings

Unemployment level in Latvia decreased to 8.7% in 2017

85.4 thousand people aged 15–74 in Latvia were unemployed in 2017. Compared to 2016, the number of unemployed persons has dropped by 9.9 thousand or 10.4 %.

Council member: ECB is openly dissatisfied with restrictions imposed on Rimšēvičs

The European Central Bank (ECB) is openly dissatisfied with restrictions imposed on one of its council members – governor of the Bank of Latvia Ilmārs Rimšēvičs, said council member of the Bank of Latvia Edvards Kušners in an interview to 900 seconds programme of LNT.

Defence expenditures in Latvia planned at EUR 234 million in 2018

Latvian government plans to spend EUR 234 million on defence projects, including procurement of transports, ammunition, armaments and individual equipment, in 2018 as confirmed by Defence Ministry.

Ministry cancels mandatory procurement component permits for five CHP plants

Latvia’s Economy Ministry has made a decision to cancel the permit to sell electricity within mandatory procurement component for five other renewable energy co-generation plants plants: SIA Madonas Eko, SIA Eiro-Āzijas investment agency, SIA EVOKEM, SIA M Parks, and SIA Eco Latvis.

NSC proposes Maizītis for a second term as Chief of Constitution Protection Bureau

Members of Latvia’s National Security Council have decided to propose the current head of the Constitution Protection Bureau Jānis Maizītis for another term at the helm of this institution, as BNN was informed by the State President’s Chancellery.

Latvijas gāze’s subsidiary Gaso proposes reducing gas transmission price

Latvijas gāze’s subsidiary Gase has turned to Public Utilities Commission with a proposal for a new natural gas transmission system service’s tariff project, providing for a reducing gas transmission price by 18-46% for more than 95% gas consumers.

FCMC invites Bank of Latvia to provide ABLV Bank with yet another emergency loan

The Finance and Capital Market Commission (FCMC) has invited the Bank of Latvia to issue ABLV Bank another emergency loan.

Crime rate in 2017 was the lowest in Latvia’s history

Last year’s crime rate turned out the lowest in Latvia’s history, as reported by Prosecutor General Ēriks Kalnmeiers in his annual report.

LEC: government priorities should include searching for causes and solutions, not the guilty

Latvian Employers’ Confederation (LEC) is worried about ongoing events and their negative effect on the stability and future development of the country’s economy. LEC believes that stabilization of the financial situation requires careful coordination of actions between institutions and the government.

Producer price level in Latvia grew 0.9% in January

Compared to December 2017, level of producer prices in Latvian industry rose by 0.9 % in January 2018. Prices of products sold on the domestic market went up by 1.2 % and prices of exported products by 0.6 %.

Latvian President believes country’s financial system is stable; prime minister plans to report to European Council

«Latvia’s financial system is stable, and there is no reason to worry about possible instability of the banking system. Banks continue working as usual,» says the President of Latvia Raimonds Vējonis.