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Sunday 25.09.2016 | Name days: Rauls, Rodrigo
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KVV Group threatens Latvia with possible fine of up to EUR 300 million

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUUkrainian KVV Group is preparing to submit a complaint to the European Commission’s Anti-Monopoly and Corruption Prevention Committee against Latvia. This could result in Latvia having to face a fine of EUR 150 to EUR 300 million, as reported by KVV Group’s press secretary Natalia Napadovskaya.

Ukrainian KVV Group has prepared a number of documents to be submitted to the EC. The company emphasizes that the fine will not only negatively impact the country’s image, but also the economic situation as a whole. It may also cause a long-term crisis. This is why KVV Group has once again voiced its readiness to engage in talks to help resolve the lasting crisis at KVV Liepājas metalurgs.

«KVV Group invites Latvian society and actually thinking politicians to stop the shady manipulations that surround KVV Liepājas metalurgs. Our company once again declares its efforts to join constructive talks to breathe new life into Liepaja’s most important company,» – emphasizes Napadovskaya.

She explains that entering Latvia’s economy meant not only the investment of a significant amount of money for KVV Group, but also taking on major public commitments, because the successful function of KVV Liepājas Metalurgs means the preservation of jobs for hundreds of Liepaja residents and payment of taxes to the state budget.

«We still understand how important those commitments are. We have never turned away from them. Unfortunately, in the two years since the procurement of KVV Liepājas metalurgs we have had to face undeserved relations between the state and foreign investor,» – said Napadovska.

KVV Group’s press-secretary reminded that the contract on the procurement of the metallurgy company at the end of 2014. The contract’s rules state that transactions between the state and the investor in accordance with the established schedule. EUR 21.5 million was aid in 2014. Not only was a payment for 2015 performed in January 2016, an advance payment for 2016 was also performed.

«After the purchase of the production plant, KVV Group and its attracted foreign expert performed an audit of the plant’s documents. It was uncovered that the asset evaluation performed by the Latvian side had been exaggerated five times. More inconsistencies were found between numbers put in the plant’s business plan and the actual business situation. If we add the especially unhealthy conjuncture on the market, high raw material prices and unjustifiably high electricity tariffs, we have to admit that KVV Liepājas metalurgs’ function has brought only chronic losses lately. The investor cannot afford to ignore this,» – Napadovska admits.

She notes that it makes it impossible for KVV Group to fulfill its obligations. «Because of the aforementioned reasons, our efforts to review conditions of the contract should come off as reasonable,» – Napadovskaya explains.

«In spite of the clear facts and generally objective factors that have been obstructing the work of KVV Liepājas metalurga all this time, Finance Ministry’s officials, whose goal should be the reviewing of investment rules, instead have been putting obstacles in our way. The negligence of the Latvian government leads us closer and closer towards bankruptcy, which would result in the investor losing his investments. If that is the case, the government will be able to sell its assets and benefit from its own mistake,» – Napadovskaya explained.

She emphasizes that KVV Group has been trying to avoid making any harsh decisions and announcements all this time. Instead, the company hopes to find a positive solution to protect its investments all this time.

«If the two sides fail to find a solution to the dispute in a peaceful way, KVV Group will turn to a court of arbitration to recover its losses,» – Napadovskaya concluded.

Ref: 102.109.109.6782


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