The so-called Panama documents leaked by Mossack Fonseca reveal details about the structure of owners of Ventspils nafta at the beginning of this century. Documents also show Rietumu bank’s openness to service offshore companies, as mentioned by Re:Baltica investigative journalism centre and De Facto programme of TV3.
The leak of documents and correspondence of Panama-based law firm Mossack Fonseca and the public backlash that followed have been a source of serious problems for many of the world’s politicians, who were forced to explain their involvement in offshore schemes made public to the world.
According to Re:Baltica, there are no shocking truths to reveal about Latvian officials. Nevertheless, the leaked documents do reveal interesting details about certain officials. For example, the use of offshores in the so-called Ventspils transit wars, as well as activities of certain Latvian banks in servicing offshores.
Mossack Fonseca values accuracy, efficiency, confidentiality and personal attention to each client. Such was the slogan of the company that was mostly unknown a week ago.
Now that documents of Mossack Fonseca have been revealed to the world, it is known that this largely unknown company has been providing offshore services to certain Latvian figures – private and legal persons alike.
For example, the lawyer of the criminally accused Aivars Lembergs had recently asked the company to determine if her client’s name can be found in databases of offshore firms. This is not the only time Mossack Fonseca was mentioned in relation to Ventspils. Fifteen years ago, Puses Ltd, which was once an indirect co-owner of Ventspils nafta, had featured the name Annalisa Limited, a British Virgin Isles-based company, as one of its members. The foundation of this company was secured by Mossack Fonseca.
The leaked documents reveal that this ‘shelf company’ was bought by Lichtenstein-based Lopag law firm in 2001. The most interesting part took place shortly after that. Louis Oehri, head of the law firm, turned to Mossack Fonseca & Co Jersey bureau with a request to appoint ‘local directors of your choice’ to be appointed as directors of Annalisa Limited.
«The reason for that is that we currently manage two companies – one based in the British Virgin Isles and one in Lichtenstein – on behalf of our client. Each of these companies has shares in another large company. With that, directors should not be the same. In the case with Annalisa Limited, there should not be any immediate relation to Lobag,» – wrote Lopag manager, expressing disappointment that he forgot to inform Mossack Fonseca about those conditions in advance.
It should be added that Annapolis Anstalt has been among the owners of Puses Ltd since 1997. The company’s owned shared have been arrested as part of the so-called Lembergs criminal case since 2008. The prosecution believes Lembergs’ children Anrijs and Liga are the true beneficiaries of this company.
Both offshore companies were represented by lawyer Janis Zelmenis during Puses Ltd meetings in Latvia. Nevertheless, he never revealed the name the ‘one client’ that the head of Lopag had in mind when requesting delegation of authorities from Annalisa. «BDO network has decided not to comment the leaked information,» – wrote Zelmenis in a text message.
Former manager of Mossack Fonseca’s office in Riga, Vladislav Borovik, was not talkative as well. During his career in the company, Mossack Fonseca would send him documents regarding offshore companies in the interest of Latvian clients.
Now Borovik is a member of the board of QR Pay, Latvian branch office of WalleOne e-money company. He did not reply to the e-mail sent to him. None of the phone numbers related to him seem active at the moment. It was also not possible to contact him in person at work. The office secretary refused to let journalists enter the building. She advised instead to submit an official meeting request and wait for a reply.
Why was Mossack Fonseca’s office in Riga shut down after two years? It is possible that the main reason for that can be found in the leaked correspondence. Rietumu bank is mentioned very often in this correspondence. Mossack Fonseca employees relayed each other clients’ instructions about sending legalized offshore firms’ documents to Rietumu bank in Riga. Specific employees are mentioned multiple times – Sergei Schuka, Yelena Babenko and Ksenija Chernenko. Among other precautions, instructions mentioned putting only documents in the envelope, leaving no traces of Mossack Fonseca’s involvement with the package.
In a letter written by Mossack Fonseca employee Theo De Regibus to a private client – representative of france-offshore.fr Nadav Bensusan – he asks if all updated documents should be sent to a bank in Latvia. The client confirms this in his reply.
Sergei Schuka – regional director of Rietumu bank – had personally replied to at least one letter requesting to open an offshore account in the bank.
Rietumu bank denied the request to interview any of the bank’s employees and provided no answers to any of the questions sent to it.
In multiple cases, Rietumu bank was sent documents with relation to foreign companies with ties to established companies in Latvia. In those companies, Laurence Pountney Ltd – British Virgin Isles-based company, whose registered agent is Mossack Fonseca’s local office – worked as director in those companies. This company directly or indirectly owns or had owned at some point seven Latvian companies: Acario, Liberio, Amadus, Sarto, Fortal, Magsig and Jumi Centrum.
Most of those companies are registered on Antonijas Street 22 – 4. Most of the firms once based on this address have long since been liquidated, their financial activities halted by the State Revenue Service. Formally, those companies functioned in different areas: accounting services, automobile whole trade, retail trade of cosmetics and toiletries.
It was not possible to meet representatives of any of the aforementioned companies as the 4th apartment no longer exists in this building – it has been merged with the 3rd apartment. There is also no certainty if anyone actually collects mail sent to that address.
It has been publicly reported that A.C.B. construction firm had sold a tennis building and land to Amza Properties S.A. in 2009. It is now known that this offshore company is owned by ACB board members Valdis Lejnieks and Edvins Tankelsons.
In a written response, Lejnieks explains this deal with restructuring within the company: «The sale of the tennis club in Marupe was a completely legal deal with legal money. […] The reason why participants of the deal decided to use this legal form of business was because of its higher investment security in conditions of an unstable financial situation at the time. […] The range of tools available to investors to protect one’s interests in the event of an interstate investment dispute is much wider than that available in Latvia.»
State Revenue Service admits, involvement of offshore firms does not automatically mean something illegal. Nevertheless, SRS admits that there is no accurate account as to how much the state budget is affected by offshore companies.
«It is clear that offshore firms are used in two ways: as legal means, and, of course, as means to hide finances, beneficiaries and avoid paying taxes,» – says SRS director general’s deputy for tax matter Dace Peleka.