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Monday 25.09.2017 | Name days: Rauls, Rodrigo

The Latvian state pays ex-Parex owners and their relatives 12 million

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Аuthor: Evija Trifanova/LETAAfter nearly a three-year investigation the prosecutor’s office has concluded that there is not enough evidence to accuse former Parex banka owners Valery Kargin and Viktor Krasovitskis in intentional bankruptcy of their bank. Nevertheless, both will retain the status of witnesses. The investigation is likely to continue for some time.

The state invested 1 billion LVL in Parex in order to save it. Only 300 million LVL have been returned to the state so far, Nekā personīga (Nothing personal) programme of TV3 reports.

According to estimates, the state will not be able to return even half of its invested amount. Former owners of the bank, however, continue to receive generous interest rates for their deposits. A total of 12 million LVL was transferred to them since 2008. Kargin and Krasovitskis are not the only ones to be paid nearly 50 000 LVL every month, so do two of their relatives.

On November 10, 2008, Parex owners Valery Kargin and Viktor Krasovitskis signed the agreement to hand over the controlling package of shares to the Latvian state. Media representatives were present at the signing of the agreement at the Economy Ministry that day. This was the only publicly available way to follow the transfer process. Everything besides the signing of the agreement was carried out behind closed doors. Both he agreement and the government’s meeting on the Parex matter were held in secret. It was only publicly announced that the state paid a total of 2 LVL for each of the former owners of their bank shares. What the officials did not say is that Kargin, Srasovitskis and their relatives continue to receive interest payments for their deposits.

In its conclusion, the State Audit had noted that Kargin and Krasovicskis were the ones to benefit from the bank transfer, not the Latvian state.

The former Parex, now Reverta, is engaged in litigations with the former owners. Reverta believes that the two caused considerable damage to the bank and provided false information about the bank’s financial state during the transfer. The total amount of the litigations against the ex-bankers are 160 million LVL. All of the litigations are currently being reviewed by the court. Only one decision of the court is currently available. Instead of the requested 62 million LVL the court decided to secure 3.5 million from the defendants. Why the court decided the guilt of the former owners is worth so little, remains unknown. The full decision has been in writing for four months now. Nevertheless, Reverta optimistically hopes that most of the requested amount will be secured. The former owners, on the other hand, are doing everything they can in order to protect their property and money.

In the better days of Parex, the owners were not too shy of being called millionaires. This was indicated by their luxurious villas in Jurmala and expensive cars parked at the main Parex building in Riga. But now it seems they own next to nothing in Latvia. Only four items of personal property were pledged. The bank account used by the state to transfer monthly interest payments has been frozen. Meanwhile, no restrictions were imposed on their relatives. Seeing as how Kargin’s and Krasovitskis’ assets are frozen, the state transfers them both minimum salaries – 200 LVL. The once wealthiest bankers in Latvia accept this money.


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