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Wednesday 17.01.2018 | Name days: Tenis, Dravis

Liepājas metalurgs transfers millions to firm involved in criminal proceedings

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Author: LETAWhile the Latvian state is trying time and time again to save Liepājas metalurgs (LM) from the brink of bankruptcy at the expense of the planned budget, the owners of the largest Latvian industrial plant pull off shady deals behind its back.

The millionaires of LM make it look as though they are poor, while politicians pay their debts. The shock about this whole situation is growing ever more in neighbouring countries of Lithuania and Poland, where many LM’s business partners are situated, as reported by Nekā Personīga (Nothing personal) programme of TV3. According to the programme, LM is cheating the state and part of its business partners.

It is clear, however, that it will not end with shock alone on the Polish border. LM has caused losses for a number of Polish companies, and one of them has decided to turn to court against LM.

Polcopper firm is one of the largest companies in the industry in Poland. Its main business direction is trading in metal scrap. LM and Polcopper became business partners last autumn. At the time, LM offered good prices for scrap. It seemed suspicious that, unlike other European partners, LM refused to insure bilateral transactions. The deciding fact, however, was that LM’s guarantee was the Latvian state. The Polish had agreed to supply Liepaja with scrap. LM paid for the supplies at first, but then the problems began. When the unpaid amount reached 2 million EUR, LM announced that it had ended up in financial difficulties. Polcopper representatives had met with LM’s owners – Sergei Zakharin and Ilya Segals. Some solutions were promised, but not money.

Polcopper understood that the industry is going through tough times and asked LM to make payments in the form of products – steel bars. Part of the debt was received, a whole ship was rented in order to transport the remaining part, but then LM suddenly refused the agreement. Then the Polish company decided to transport everything by land. When everything was prepared, LM informed them at the last moment that the revolving crane is broke. The Polish manager said it will get another one in Liepaja, but LM refused. In the end, LM’s lies surfaced – the Polish manager found out first hand that the crane is fully functional, and has been all the time. Only difference – LM had been sending cargo somewhere else.

Who was the recipient of the cargo LM had been sending while it was lying to Polcopper is anyone’s guess. It is known, however, that there is a firm in the general direction of Lithuania – Poland route. This firm was being covered by LM’s lies. It is this firm that received 4 600 000 EUR from LM. It is the Lithuanian Torlina. Its managers were previously arrested for fraud in the metal market.

Lithuanian prosecutor’s office is currently investigating the case relating to Torlina and LM. Investigators admit that it is rather complicated and has a long history.

“We can confirm that the investigation was initiated in 2010. It is being investigated on an international level. However, we cannot reveal any related facts just yet”, – press department manager of the Lithuanian prosecutor’s office Rita Stundiene reports.

Latvian State Revenue Service is also interested in this case. “All information from the side of tax administration – everything SRS has collected from submitted annual accounts, transaction partners and the public sector – we are currently analysing. The fact that we have not been issuing any public statements on this matter does not mean SRS has been inactive all this time”, – deputy director general of SRS for taxes Inara Petersone reports.

According to unofficial information, charges are being pressed against Torlina. It is being accused of supplying scrap to LM while defrauding taxes with the help from Cyprus registered Anjusoma trading limited. Lithuania has lost more than 700 thousand EUR because of this scheme. Latvia’s losses are currently estimated at 4 600 000 EUR, which LM had transferred to Torlina for services behind the back of the Latvian state. Both of LM’s largest shareholders have publicly said that LM has no money to pay the Italian UniCredit. In reality, the non-existing money was quietly transferred to its business partner.

“On April 12, 2013, LM performed a payment of 4.6 million to this Lithuanian company in spite of the fact that this payment was opposed by the state auditor at the company, as well as the State Treasury and Finance Ministry. The main reason for the opposition was that there were no clear arguments or criteria that governed the logic behind the payment. Moreover – following an evaluation of the arguments LM used to justify the payment, it is now clear that those were lies”, – says the Chief of State Treasury Kaspars Abolins. He added that it is impossible to cancel the payment.

Ever since LM informed the Saeima National Economy Commission that it is on the brink of insolvency (January 22, 2013), more than 25 million LVL have left the company. There are two main directions – the aforementioned Lithuanian Torlina and the UK registered Stemcor. This means that LM was lying to the State Treasury, freely managing its funds, while the state was forced to pay for the company’s debts the whole time.

“Yes, unfortunately this is no surprise, because we have seen in the past that working with shareholders, the plant’s management is hard and fruitless. The unacceptable has happened in this situation, because, in spite of the fact that the auditor had opposed this payment, the State Treasury had opposed this payment, the plant decided to perform it. This is why everything needs to be coordinated. Priorities need to be coordinated. We know that LM’s priority is to pay back the debt it owes UniCredit”, – Finance Minister Andris Vilks said.

When asked why a proctor was not appointed, but an auditor, Vilks replied: “Specifically so that the state would not have to take full responsibility for what is going on at the plant. We would all be shareholders by now. I believe we are not ready. We should not be ready for this at all.”

Both shareholders that are to blame for all this – Zakharin and Segals – refuse to give comments. According to unofficial information, they continue to present different conditions, including conditions that would protect them from the law.


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