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Wednesday 26.09.2018 | Name days: Kurts, Knuts, Gundars

How successful are businesses owned by Saeima deputies? UGF members at the top

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUCurrently politicians in Latvia who own shares in businesses and are also true beneficiaries in capital associations are in the minority. Information compiled by Lursoft shows that 35 Saeima deputies and members of the Cabinet of Ministers own shares in businesses.

Valdis Kalnozols, a member of the Union of Greens and Farmers, seems to be the most active businessman, as he owns shares in six businesses. Members of UGF faction own twenty companies. Members of Concord own twelve.

Lursoft has performed a study of 12th Saeima deputies and government ministers to see how they’ve been able to combine their posts with business activities.

«Three opposition deputies – Vladimirs Nikonovs, Jānis Tutins and Ivans Ribakovs – are not only colleagues in the Saeima but also business partners. These politicians and three more private persons own 2006-founded SIA Saknes Plus, which is involved in magazine and periodic book publishing activities. An analysis of annual accounts shows that this company has yet to commence meaningful economic activities over the course of many years,» as reported by Lursoft representative Indra Urtāne.

According to data from the study, companies owned by Saeima deputies and ministers turned over EUR 17.96 million, earned EUR 308.86 million, provided 336 people with jobs, and paid EUR 3.05 million in taxes to the state budget last year.

«Naturally, not all businesses have had such successful results. For example, two companies (Rihards Kozlovskis’ partially owned SIA BBF Consulting and Valdis Kalnozols’ owned SIA Kalnozols un partneri) has commenced an insolvency process. Nine companies have been applied with collateral management. What is particularly interesting that of the six companies owned by Valdis Kalnozols only SIA Dizaina līnija currently has no difficulties, because other companies have either been closed down, declared insolvent or provided with guarantees,» says Urtāne.

Trade companies have the largest turnover

Thanks to an 8.74% increase of turnover last year, Concord representative Jeļena Lazareva’s owned SIA Iļģuciems has managed to take the lead away from UGF deputy Askolds Kļaviņš’ owned SIA Gandrs, which specializes in selling active leisure goods. Since 2010 the company has been steadily increasing its turnover, with it reaching EUR 4.02 million in 2016. Last year, however, the company suffered turnover decline. The annual account from SIA Gandrs available at Lursoft shows that the company’s turnover was EUR 3.84 million last year, which is 4.49% less than a year prior, says Lurfoft representative.

«SIA Iļģuciems, on the other hand, had turnover of EUR 4.03 million last year, earning in total EUR 68.77 thousand after taxes. Lazareva’s declaration shows that she had received EUR 56.06 thousand from the company in dividends and EUR 7.06 thousand in wages as the company’s financial director last year. It should be said that Jeļena Lazareva was approved as Saeima deputy in July 2017, after Andrejs Elksniņš was elected in Daugavpils Council,» comments Lursoft representative.

SIA Iļģuciems was founded in 1991. Lazareva owns 51.43% of shares in the company. The rest of the shares are owned by her mother, father and husband. Information available from Lursoft shows that the company had 31 employees, paid EUR 871.41 thousand in taxes, including EUR 111.36 thousand in social insurance fees and EUR 75.09 thousand in PIT.

«It should be said that companies owned by Saeima deputies and ministers had turned over a total amount of EUR 10.78 million or 1.88% less funds last year in comparison to a year prior. Turnover of companies owned by opposition deputies, on the other hand, have grown 4.18%, increasing from EUR 6.90 million to EUR 7.19 million. It should be said that both companies owned by deputies of the ruling coalition and the opposition worked with significantly smaller turnover last year than they did in 2015. Overall, turnover of companies of opposition deputies has declined 6.03%, whereas turnover of companies owned by deputies of the ruling coalition has dropped 6.72%. Turnover increased for twelve companies owned by deputies of the ruling coalition and five companies of members of the opposition,» says Urtāne.

Companies owned by UGF members among the highest earning

Among the companies owned by Saeima deputies, by far the most profitable one was SIA Līvānu mājas un logi, in which UGF member Jānis Klaužs owns 38% of shares. Other co-owners include Aleksandrs Surgunts (38%) and Olga Mihejeva (24%). The company’s turnover, when compared to 2016, increased 25.09% last year, reaching EUR 926.90 thousand. The company’s profits grew 76.41%, coming to EUR 93.60 thousand after taxes, which secured EUR 30.40 thousand of dividends for the deputy.

TOP businesses in which shares are owned by Saeima deputies or ministers

Businesses owned by members of UGF remain among the most lucrative companies. According to data from Lursoft, aside from Klaužs’ SIA Līvānu mājas un logi, Augusts Brigmanis’ owned Priedule farm and SIA Piebalgas alus, 38% of shares in which are owned by Agriculture Minister Jānis Dūklavs, was among some of the most lucrative businesses in 2017.

Brigmanis’ owned Priedule farm had turnover of EUR 578.70 in 2017. 75.3% of this amount came from sales of cereals, and 24.7% from colza seed sales. The farm received subsidies worth EUR 117.39 thousand for agriculture, as well as subsidies for the procurement of machinery with EUR 24.33 thousand. The farm concluded the year with profits of ER 82.95 thousand, according to available data.

SIA Piebalgas alus is the most lucrative of the businesses owned by Agriculture Minister Jānis Dūklavs. The company in which the minister owns 38% of shares had managed to increase its turnover to EUR 3.62 million in 2017, earning EUR 72.68 thousand after taxes. The company produced 3,056,576 litres of beer last year, which is 32,597 litres last year a year prior.

Urtāne mentions that companies owned by deputies of the ruling coalition and ministers of the government managed to increase their profits by 19.21% last year in spite of general turnover decline. Total profits of those companies after taxes were EUR 342.03 thousand in 2017. Companies owned by members of the opposition concluded 2017 with losses worth EUR 33.17 thousand.

Number of employees – nearly unchanged

As previously mentioned, companies owned by Saeima deputies provided jobs to 336 people last year. This index remains practically unchanged when compared to previous years: estimates show that those companies had 330 employees in 2016 and 336 in 2015.

Lursoft has found that among all the companies owned by ministers and Saeima deputies, SIA Gandrs – owned by UGF member Askolds Kļaviņš – has the most employees. 88 people were employed by the company in 2018, which is ten more than there were in 2016. The company’s PIT amount has grown 45.20% over the course of the year, reaching EUR 70.87 thousand. The volume of state social insurance fees has grown the reach EUR 126.96 thousand (+25.17% compared to 2016). The company’s total tax payments to the state budget reached EUR 214.58 thousand last year.

Also according to information from Lursoft, out of forty eight companies owned by deputies and ministers, only seven companies had at least ten employees last year.

Volume of paid taxes up 5.20%

Companies owned by Saeima deputies and ministers in Latvia paid taxes worth EUR 3.05 million last year, which is 5.20% more than a year prior.

SIA Piebalgas alus was the biggest taxpayer among those companies last year. The amount paid to SRS was EUR 1.35 million last year, which is 3.58% more than the amount paid in 2016, according to information from Lursoft.

It should be added that in 53.33% cases of tax payments made by companies owned by Saeima deputies and ministers the amount of taxes paid to the state budget had increased last year. One of the companies whose paid tax amount had increased the most rapidly was KPV LV member Artuss Kaimiņš’s SIA Suņu būda, Lursoft reports.

There were also eight companies that had only one employee last year. This includes Concord member Jūlija Stepaņenko’s SIA Wave media, Klementjevs’ SIA Brāļi Klementjevi, and Morozovs’ SA Agent Arsenal, as well as a number of others.

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