bnn.lv Latviski   bnn-news.com English   bnn-news.ru По-русски
Ceturtdiena 17.08.2017 | Name days: Oļegs, Vineta
LatviaLatvia

No peace possible between Parex bank and its former shareholders

FaceBook
Twitter
Draugiem
print
(+1 rating, 1 votes)

Baltic news, News from Latvia, BNN-NEWS.COM, BNN-NEWS.RU

Victor Krasovicki (on the left) and Valery Kargin

Last Friday, September 16, the court held a preparatory hearing of the claim against Valery Kargin and Victor Krasovicki, former shareholders of Parex bank. Judge Gvido Ungurs proposal to reach a settlement agreement did not satisfy either side.

Parex bank against its ex-owners

The judge had asked for documents from the State Revenue Service (SRS), the Association of Commercial Banks and other institutions, thereby satisfying the defendants lawyer Ugis Grube’s request. Grube wants a copy from the SRS on audit conducted on September 12, 2009, and reports from January 1995 to December 2008 on Kargin and Krasovicki investments in Parex Bank. The argument of the defendants is quite logical – before Parex takeover there were no problems with taxes, while afterwards two million lats tax debt was discovered.

In addition, Grube has requested data from dozens of Latvian credit institutions on investment interest, as he believes that such information could help make sure that the interest rates of Parex bank were not that different from other banks.

Agris Bitans, representative of the bank, requested to reject this petition. According to him, the aim of the process is coming to terms with losses caused by Kargin and Krasovickis transactions, rather than finding out the situation in the banking sector. Lawyer’s active debates resulted in neither of the parties showing any interest in reaching settlement. The hearing is now scheduled to take place on November 9.

What’s at stake

Let’s remember the case. Parex Bank believes that its former owners – Valery Kargin and Victor Krasovitski’s actions have posed the bank 62 million lats losses. Thus the bank requires to compensate the sum. With the help of the court proceedings and seizure of properties, Parex bank is trying to avoid interest payments to its former owners for their investments in subordinated capital. According to the new Parex bank management, these investments are highly disadvantageous for the bank. It is pointed out that even when the state took over the bank, its ex-owners still were practically paid a monthly salary of 300 000 lats in the form of interest payments.

In accordance with deposit agreements concluded back in 1995, the founders must be paid dividends (24% per year) for the next 37 years.

In 2007, Kargin received 3.35 million lats in interest payments alone, while the sum hit 2.52 million lats a year after. Krasovickis was paid 1.24 million and 0.76 million lats, respectively. Of 103.1 million lats Parex subordinated capital, invetsments of the former shareholders amount for 36 million lats.

Minority shareholders against Parex Bank

Parallel to the “process for 62 million lats”, The Constitutional Court keeps hearing the case against a norm included in the Law on Credit Institutions. Seven of Parex Bank minority shareholders have filed a claim to the Constitutional Court, asking to examine Law on Credit Institutions Article 59.5 compliance with the Constitution.

This Article states that if the Cabinet of Ministers, after the credit institution management’s request, decides to increase the state capital in the bank, the board is righteous to do that, without calling a shareholders’ meeting.

Investigators of the case believe that this norm allowed Parex board to repeatedly boost the bank’s capital without the consent from minority shareholders. Such steps reduced their partnership four times – down from 8.4% to 2.1%.


Leave a reply

airBaltic’s number of carried passengers reaches a record in second consecutive month

Latvian airBaltic airline carried 393,312 passengers in July 2017, which is 21% more than the same period last year. The number of passengers carried by airBaltic remains the highest it has ever been in the airline’s history, BNN was informed by the company.

Brivais vilnis: nearly all fish processing companies are experiencing losses

Currently nearly all fish processing companies in Latvia are experiencing major or minor losses, says Brivais vilnis chairman Arnols Babris.

American helicopters to perform low-altitude flights within Latvia’s airspace

U.S. Air Force Brigade’s Task Force Phoenix helicopters, which are stationed in Latvia as part of Atlantic Resolve operation, will be performing low-altitude flights from 16:00 to 18:00 from Lielvarde to Dobele on Friday, 18 August.

Healthcare Ministry’s state secretary Karlis Ketners may be replaced

Latvian Healthcare Ministry may replace its state secretary Karlis Ketners. It is possible he will be transferred to work at Finance Ministry, as reported by LTV.

Suspects in Europe's insecticide egg scandal before Dutch court

In the Netherlands, two men have been in court in relation to the scandal of eggs containing banned insecticide that has caused an EU-wide health scare and cost millions of euros of damages.

Indian national with fake documents apprehended on Latvian border

An Indian citizen travelling from Moscow on a bus was caught at Terehovo border control point in Latvia for presenting officers a fake EU family member’s resident card. No criminal process was launched. The person returned to the country he was travelling from.

Latvijas dzelzceļš will not have to pay dividends from last year’s profits

The government decided on Wednesday, 16 August, that Latvijas dzelzceļš will not have to pay dividends from last year’s profits, which were EUR 880,998.

Latvian citizenship provided to 103 people

The Cabinet of Ministers has issued an order to provide Latvian citizenship to 103 people through naturalization.

Estonian Inbank's profits reach EUR 5.7 million in six months

Estonian financial services' provided Inbank made a profit of 5.7 million euros in the first half of 2017, which is a 429.4% increase compared to the respective period in 2016.

Agriculture Ministry invites residents to sign up for measures to support fisheries

From 21 August onward, Rural Support Service plans to start accepting applications for projects to receive support from European Maritime and Fisheries Fund’s action plan for development of fisheries in 2014-2020 as part of projects Innovation, Productive Investments in Aquaculture and Fishing and Aquaculture project processing.

Estonia seeks to improve reputation of state as employer

As the Estonian Ministry of Finance wishes to boost the reputation and brand of the Baltic country's public sector, it has announced a procurement tender aimed at preparing an action plan for reaching these goals.

Warning: there may be short-term problems with Swedbank internet banking functionality

Because of Swedbank’s planned IT modernization work scheduled for the night to Thursday, 17 August, there may be short term problems with payment card and internet banking functionality, the bank warns.

Aseradens: neither Usakovs nor Lembergs should be allowed to become prime minister

If he became chairman of Unity, Economy Minister Arvils Aseradens would mobilize democratic forces to prevent the possibility of either Aivars Lembergs or Nils Usakovs becoming prime ministers, Aseradens said in an interview to 900 seconds programme of LNT.

Caksa believes increasing wages for doctors would improve politicians’ credibility

The planned wage increase in healthcare could be the first step towards improving politicians’ credibility, says Healthcare Minister Anda Caksa.

Bill Gates donates USD 4.6 billion, reduces shares in Microsoft

The co-founder of the U.S. computer software firm Microsoft, Bill Gates, has allocated to charity 4.6 billion U.S. dollars (3.9 billion euros), which is the philanthropist's highest donation since the year 2000.

LOSP proposes using electronic packing slip system to reduce fraud

An electronic packing slip system for goods would be invaluable for agricultural goods, because it would help push out and reduce VAT fraud, says Latvian Agricultural Organisation Cooperation Council.

Latvia and Russia agree on exchange of additional 3,000 universal permits for cargoes

Latvia and Russia will exchange 7,000 universal permits for international cargo transports in 2017. This will be the largest universal permit volume in the past 15 years, as reported by Road Directorate.

Sierra Leone hit by tragic mudslide

A tragic mudslide has taken place in Sierra Leone, where flooding in the capital Freetown caused a mudslide, in which nearly 400 people have been have died.

Talks with potential KVV Liepājas metalurgs buyers to conclude in August

Talks with potential buyers of the insolvent KVV Liepājas metalurgs will conclude at the end of August, says representative of the company’s insolvency administrator Dzintars Hmielevskis.

Estonian e-Residency programme in deal with Paymentwall

International payments facilitator Paymentwall in collaboration with the Estonian programme of e-Residency program started this week Passport, a new service, with which businesspeople around the world will have the opportunity to found an EU company and access payment and other supporting services via internet.

Prosecutor: in parallel to Oligarch case, KNAB also worked on other cases

In parallel to the investigation of the so-called oligarch case, Corruption Prevention and Combating Bureau also continued working on other cases, said chief prosecutor Modris Adlers.

62.2% of Latvia’s population was employed in Q2 2017

Since Q2 2016, the employment rate in Latvia has increased by 0.8 percentage points. In Q2 2017, Latvian employment rate (62.6 %) was the highest recorded since Q2 2008 (63.1 %).

LIZDA: many uncertainties about education process appear just prior to the school year

Two weeks prior to the beginning of the new school year there are many uncertainties about the education process and teachers’ wages, said Latvian Education and Science Workers' Union chairperson Inga Vanaga in an interview to 900 seconds programme of LNT.

Several candidates to compete for the post of chairman of Unity

Economy Minister Arvils Aseradens, deputy chairman of Unity Edvards Smiltens and Riga City Council deputy Vilnis Kirsis intend to compete with one another for the post of head of Unity, as confirmed by the party’s representative Elina Bivina.

City of Tallinn urged to quit paying PBK TV 500,000 euros

Tallinn city government should allocate the 500 000 currently spent per year in buying television programmes in the Russian-language TV channel PBK to the Estonian state Russian-language TV channel, ETV+.