Accused politician Aivars Lembergs and his family are alleged to have played a key role in defrauding the subsidiary of the Latvian Shipping Company (LASCO) - Latmar Holdings Corporation (Latmar) out of money. They are believed to have derived the greatest personal benefit. Therefore, the British Commercial Court – a subdivision of the Queen’s Bench Division of the High Court of Justice has launched new proceedings against Lembergs, his children and several other persons.
On suspicion that Lembergs allegedly defrauded Latmar out of at least five million dollars between 2008 and 2009, the court has been asked to impose an international asset arrest that totals about nine million pounds. Besides Latmar as the applicant is also asking to add as defendants Evelina Didrihsone, Cerelus Ltd, Andris Purmalis, Endale Holdings Ltd, Victor Dudko, Aivars Lembergs, his son Anrijs and daughter Liga, Vladimirs Solomatins, Andris Vilcmeiers, Uldis Pumpurs, Vladimirs Krastins and Mamerts Vaivads.
Documents of the court case available to the portal BNN show that Latmar also wants the court to prohibit Anrijs Lembergs and Liga Lemberga to exercise their rights as Cerise Trust beneficiaries. The court is also asked to ban Liga Lemberga from her power as one of the two Canrif Limited (Canrif) directors. The documents suggest that the proposed defendants were all members of fraud.
They also reveal that most of the funds withdrawn from Latmar in December 2008 were divided between two Cyprus companies – Cerelus and Endale. Evidence links all the proposed defendants with these companies. The primary objective of Latmar scam was to provide funds in order to finance the purchase option or maintain it under a contract established between Latvian entrepreneurs and Vitol Group’s subsidiary Euromin Holdings (Cyprus) Limited (Euromin). The contract foresaw that if the terms were met successfully, the above mentioned companies would gain control over AS Ventspils Nafta (VN). VN is the majority shareholder of the Latvian Shipping Company, which is in turn 100% Latmar shereholder. Therefore, Latmar asks to add as defendants the above mentioned persons, including Aivars Lembergs, his son Anrijs and daughter Liga. The company also asks the court to impose a global asset freeze.
Anrijs Lembergs and Liga Lemberga are the beneficiaries of a family trust Cerise Traust, which owns considerable assets. Besides, their assets have also been placed in other trusts. Therefore, Latmar seeks the court’s help not to allow wasting the money before any court ruling comes into force. The manager of the trust is a legal entity controlled by Lembergs lawyer, Jakob Hirschbaeck. He oversees his hidden interests and assets abroad.
BNN already reported, Hirschbaeck’s testimony confirms Lembergs’ involvement in privatization of 38.6% state-owned AS Ventspils Nafta back in October 2006. He also spoke out about an agreement with Vitol subsidiary Euromin Holdings (Cyprus), which became the owner of the Ventspils Nafta shares. Hirschbaeck also points to a number of offshore companies – Cerelus Ltd (Cerelus) and Endale Holding (Endale), which were transferred money allegedly defrauded out of the Latvian Shipping Company’s subsidiary via fake consulting contracts.
It appears that Latmar learnt only last July that Endale was in charge of transferring funds to Cerelus account, under the contract that granted it the option to purchase VN shares owned by Euromin. Prior to that, Latmar did not know that part of money generated from the fraud went to Cerelus and/or Endale. But Vitol knew of the companies, as it is the owner of Euromin. Euromin was used in corporate transactions with Cerelus and Endale between 2006 and 2009, when it got hold of VN shares.
Hirschbaeck has also named the interested parties from Cerelus and Endale. Three of them are LASCO Council members – Uldis Pumpurs, Vladimirs Solomatins and Andris Vilcmeiers. However, he has also identified Lembergs’ son Anrijs, who up until December, 2010, received a grant of 7 000 lats from LASCO on the grounds of a consultation agreement. Similarly, he also received monthly 1 000 dollars as the member of LASCO Audit Committee from May 30, 2003, until April 30, 2009.
Materials of the court case available to BNN show that Paul Mulholland from Vitol was unable to explain what services LASCO received from Anrijs Lembergs in return.
Furthermore, according to him, Vitol and VN were holding regular discussions on Vitol’s relations with Ventspils Naftas Tranzits (VNT). The talks also lasted throughout 2006, when the Latvian government announced privatization of 38,6% VN shares at a public auction. Vitol decided to bid via Euromin, a company owned solely by Vitol Group, to improve its chances of becoming a strategic partner in the terminal. It was important for Vitol (in case Euromin wins) that other VN shareholders – including AS Latvijas naftas tranzits – support its intention to become a partner.
Hirschbaeck’s testimony to the British court proves that, months before the sale, “Latvian investors” launched talks with Vitol representatives. They agreed that Vitol subsidiary was to become owner of Ventspils Nafta, while Vitol would cooperate with the “Latvian investors”. They were supposed to purchase Vitol shares in Ventspils Nafta in late 2009. They were believed to have signed the so-called Put Call Agreement. Hirschbaeck names Lembergs, his son Anrijs and Andris Vilcmeiers, Anrijs’ associate, as the persons leading the group of “Latvian investors”. Millionaires Vladimirs Solomatins, Uldis Pumpurs, Mamerts Vaivads and Lembergs’ daughter Liga are also mentioned.
BNN information shows that Lembergs attended most of meetings dedicated to financing Cerelus and Endale. According to legal documents, also Mulholland confirms that Aivars Lembergs was among those behind the “group of investors”, which held discussions with Euromin on the conclusion of the Sale and Purchase Agreement.
Vitol was reluctant to answer BNN questions relating to the court case, noting that in general it never comments on ongoing legal proceedings.
“However in this instance Vitol does support all efforts to return the money that was stolen from LASCO by the previous management, as this money belongs to all the legitimate shareholders including the Latvian State, the State Social Insurance Agency,” says Vitol representative Mark Ware.
According to information available to BNN, back in November 2008, when meeting with representatives of Cerelus and Endale, Solomatins suggested establishing a company (Arindal) in order Hirschbaeck could provide consulting services to Latmar. In December 2008 meeting Hirschbaeck learnt from Solomatins, Anrijs Lembergs and Vilcmeiers that Arindal could “lend” Endale four million dollars. Besides, Hirschbaeck claims that all three Lembergs family members and certain other individuals had some “economic or commercial interest” in Cerelus and Endale. With the help of intermediaries, Hirschbaeck and the company Fidux received instructions on Cerelus and Endale also from Aivars Lembergs and his son Anrijs. The same way “reports” were also delivered to Liga Lemberga.
Allegedly, persons behind Cerelus and Endale, including all three Lembergs family members, were the ones who withdrew Latmar funds back in December 2008. This took place under false initial Arindal contracts in order the persons could meet their obligations stated in the Sale and Purchase Agreement.
Legal documents also reveal a scam via disguised and false consultancy contracts with Arindal and Media Focus. Also Fidux is suspected of complicity, as it has confirmed that funds Arindal defrauded out of Latmar were transferred to Cerelus and Endale.
Therefore, Latmar asks the court to conclude that Lembergs, thanks to his transactions with Fidux and close contact with his son Anrijs, Vilcmeiers and Solomatins, knew about Arindal scheme and was in charge of it. He also knew that Endale received four million dollars, defrauded out of Latmar via Arindal. It appears that both Aivars Lembergs and his son played a key role in the scam. Besides, evidence collected by Latmar does not show any Lembergs’ attempts to protect his son from fraudulent transactions he himself was involved in.