Latviski English По-русски
Friday 15.12.2017 | Name days: Jana, Johanna, Hanna

Volkswagen dealers had organized procurements in officials’ stead

(No Ratings Yet)

Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUE-mail correspondence of Volkswagen dealers reveals that companies had been organizing public procurements on their own.

According to information acquired from an e-mail correspondence, De Facto programme reports that Volkswagen dealers in Latvia had written all the technical specifications for required vehicles on behalf of officials. They had also asked their potential competitors not to participate in organized procurements.

Nearly half of the cars that were procured by Liepaja City Council or its subsidiaries over the course of 2007-2012 were supplied by Volkswagen dealer in Latvia – SD Autocentrs. The correspondence with the dealer reveals that the company likely did not have to work hard to win procurements. It can be assumed that SD Autocentrs had helped itself during procurements: written technical specifications, found fictive participants, and had supplied the necessary vehicles in the end.

For example, four years ago, one of SD Autocentrs employees had sent a letter to Liepajas energija: «Greetings, in the attachment I have prepared specifications for you. Once you have announced it, please let me know and I will prepare offers for myself and other participants. Other participants could be the last time [Competition Council’s informant] and Venta motors. […]»

A couple of weeks later, this employee had sent e-mails to other Volkswagen dealers in Latvia. It is likely that the goal of this was to ensure there would not be a competitor who would offer a lower price. «[…] Client specifications were prepared by me and cars are on their way from the factory. Fleet offer has also been prepared, so please take into account our work. […]»

The Volkswagen cars parked outside of Liepaja municipal police department had been procured by SD Autocentrs. In 2012, one of SD Autocentrs’ employees had sent a letter to other Volkswagen dealers in Latvia. In this letter he noted: «I would like to inform you that after long talks Liepaja municipal police approved the procurement of3 cars and we have jointly developed technical specifications for this procurement, so we would like to ask you to support SD Autocentrs in this procurement and not submit your own offers.»

Unfortunately for SD Autocentrs, its victory in this particular procurement had attracted the attention of Latvian Competition Council and Corruption Prevention and Combating Bureau. It is now known that SD Autocentrs’ employee’s e-mail was written retrospectively: «In the attachment I have sent you documents for the procurement in Liepaja Special Economic Zone. […] This procurement was announced with May 23rd and the deadline for submission in May 27th. My proposal submission date is May 24th, that of Venta motors is May 26th, yours is May 25th, so do put May 25th, 2011 everywhere you need to. […] As you can see, the procurement is being organized retrospectively. This is why I would like to ask you to compile everything you need to as soon as possible. […] Cognac is on me!»

Mayor of Liepaja Uldis Sesks believe «the procurement had been legally accurate and economically sound. I do not have any documents to prove it had been organized in retrospect. We had performed an assessment of the employees who had held the procurement. There was nothing to confirm that they had abused power and caused losses for any of the institutions.»

Unlike Sesks, CPCB believes four members of the procurement committee in Liepaja are guilty of forging documents. However, the criminal process had to be concluded because of limitation period.

On top of that, one of the procured cars – Volkswagen Phaeton – has become Sesks’ official car. Sesks had once been one of the managers and owners of SD Autocentrs, though the company had a different name back then.

Correspondence of dealers reveals that there had likely been fictive procurements in Liepaja and other municipalities, like Kuldiga and Aizpute.

In addition, it seems dealers had formed good relations with managers of state owned companies as well. For example, it is possible that corruptive schemes had been realized by the previous board of LTV seven years ago. Other e-mails say dealers had also agreed on prices they would offer.

CC has fined the companies that were part of the cartel. Officials of state and municipal companies will be investigated by CPCB. No information is currently available on any plans in regard to the possible measures against officials.


Leave a reply

Citadele Index: businessmen are more optimistic about economic growth

After a four-year gap, optimism has been noticed in all of Latvia’s business sectors. For the third consecutive quarter Citadele Index value exceeds 50 points. Businessmen are also positive about the country’s economy and their own finances, according to the final Citadele Index study for 2017.

Bank of Latvia increases GDP growth outlook to 4.7% for 2017

Bank of Latvia has decided in increase gross domestic product growth outlook from 4.2% to 4.7% for 2017, as reported by the bank’s governor Ilmārs Rimšēvičs.

Latvian residents’ opinion of government’s work remains negative

Latvian residents voiced the biggest degree of dissatisfaction about the development of the situation in Latvia and the work performed by the government. Although the previous evaluation of government’s work had increased by four points, it has since declined by two points, according to data from Baltic International Bank’s Latvian Barometer.

Eel fishing to be restricted in Baltic Sea for three months

European Union Fisheries Council has decided to restrict eel fishing for three months in 2018 in all waters, including the Baltic Sea. Although the World Wide Fund for Nature and environmental organization in Europe view it as a notable first step, these efforts are unlikely to have a major impact on the most important problem – eel population continues declining rapidly, as noted by WWF.

LCCI: increase of electricity bills for thousands of companies in unacceptable

Latvian Chamber of Commerce and Industry (LCCI) categorically opposes increasing electricity bills for the majority of small and medium-sized companies due to mandatory procurement component’s differentiation. The organization believes that this would basically introduce a new additional tax, making them even less competitive.

Head of Latvian Association of Regions to spend Christmas thinking on remaining in the party

Dissatisfied with multiple decisions made by Latvian Association of Regions (LAR), Riga City Council member Mārtiņš Bondars will spend the holiday thinking about his place in this political party, as he mentioned in his interview to Rīta panorama or LTV.

Estonian fund permitted to purchase several Latvia energy production companies

Latvian Competition Council has permitted Estonian fund to purchase several energy production and agricultural companies.

Meat processing giant sees room for growth in ready-to-eat foods

Consumption in the meat market segment of ready-to-eat foods is growing quickly, evaluated Finnish meat processing group HKScan that is planning to invest eight million euros in its factory in Estonia.

To fight for national minority schools, Russian representatives promise to hold a referendum

Defenders of Russian schools in Latvia promise to organize a referendum for autonomy of national minority schools, said co-chairman of Latvian Russians Association Miroslavs Mitrofanovs in regards to the transition to education only in Latvian language.

Tax payment process from capital growth to change in Latvia

As part of the tax reform, changes will be added to the Personal Income Tax Law starting from 1 January 2018. One of the changes is associated with payment and declaration of income from capital growth. The tax rate and the term for submission of declarations on income from capital growth will change next year.

Tusk deems EU migrant quotas ineffective as some states oppose taking in migrants

Donald Tusk, the head of the Council of the European Union and chairman of this week's EU summit, has evaluated that mandatory EU-wide quotas are ineffective and that there is a split between east and west as regards asylum policy.

Riga City Council’s 2018 budget – poorly planned or well-developed?

As the vote for the 2018 budget of Riga City Council draws near, representatives of all opposition parties say they will not support it as long as politicians of the ruling coalition continue viewing the city’s most important financial document as good and aimed at development.

Euro area economy has grown quicker than expected, European Central Bank estimated

Growth has been at a faster pace in the eurozone prompting the European Central Bank to raise its economic growth forecasts.

Weekends in Latvia expected to be snowy

A layer of snow will form in Latvia’s central and western regions that will remain until the middle of next week, as reported by State Environment, Geology and Meteorology Centre.

Opinion: Latvia at risk of restricting healthcare to 300,000 people

Kustība Par! political party has sent a letter to Latvia’s President Raimonds Vējonis, asking him to return to the Saeima the recently approved law on healthcare funding legislative draft. According to the party, the law restricts healthcare for 300,000 people in Latvia.

Lithuania’s 2018 budget focuses on spending cuts, NATO commitment and social security

Lithuania's 2018 budget, approved this week by the Seimas, Lithuanian Parliament, makes history for being the first budget ever with fewer spending for the governmental sector, the commitment to NATO of earmarking 2 per cent of the gross domestic product to defence and bigger allotments for social security. The budget was adopted by 84 MPs, 29 voted against, with 15 abstentions.

EU member states have to strengthen measures against sexual abuse of children

Member states of the European Union have to take more serious measures and cooperate more intensely with Europol and information technology industry to better combat sexual abuse of children, as noted by members of the European Parliament.

Latvian parliament views initiative for changing VAT rate for food product

On Thursday, 14 December, Latvia’s Saeima made its decision on the collective application that proposes reducing VAT on everyday healthy food products and increasing VAT on unhealthy products.

Maxima: residents have become more conservative in their choice of products

In Q2 and Q3, a higher degree of conservatism was noticed in residents’ choice of products. The number of buyers who gladly purchase new products has declined, whereas the number of buyers who do not change anything in their purchasing habits has increased, according to results of a study performed by Maxima.

Civil processes to be sped up and simplified in Latvia

On Thursday, 14 December, Saeima supported amendments to the Civil Process Law in the final reading. Amendments propose several major changes to the process of review of civil processes to make court sessions quicker and more efficient.

State Auditor dissatisfied with parliament’s slow legislative process

Latvian State Auditor Elita Krūmiņa plans to inquire to the Saeima about the delay with the approval of the legislative draft on the expansion of authority of her institution, as she mentioned in an interview to Rīta panorama programme of LTV.

Aldaris commences exports to France, China and Netherlands

Aldaris concludes 2017 with three new export contracts, commencing exports of products to China, France and Netherlands. Until now Aldaris has exported products to eight markets, with the largest one being United Kingdom, taking up 78.71% from Aldaris export volume, as reported by the company.

Estonian budget passed with 0.25 billion-euro deficit

The Estonian Riigikogu with 55 votes against 41 has passed the country’s 2018 state budget bill planning to spend by 0.25 billion more than it is planned to earn.

AFSAL: loan requests in non-banking industry are declined in 69% of all cases

In the first six months of 2017 Alternative Financial Services Association of Latvia (AFSAL) issued a total amount of EUR 84.7 million in consumer loans. No increase is noted in this amount when compared with the same period of 2016. Increase did not exceed 0.2%, as reported by the association.

European Parliament supports changes for combating activities detailed in Panama Papers

Public registries with names of true owners of businesses, effective protection of whistle-blowers and stricter requirements for financial intermediaries are some of the proposals intended to assist with the fight against tax avoidance, as noted by members of the European Parliament.

When do you go shoping for Christmas gifts?

View Results

Loading ... Loading ...

Polls Archive

Category feed: Feed: