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Saturday 25.01.2020 | Name days: Sigurds, Zigurds
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Latvia’s KNAB interviews current and former owners of high-profile construction companies

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On Tuesday, 3 September, Armands Garkāns, co-owner of construction company Arčers and road construction company Binders, was seen at the office of Corruption Prevention and Combating Bureau (KNAB), as reported by LETA.

The agency observed him leaving KNAB office, but he did not provide any comments to journalists. Public broadcaster LTV reports that Garkāns denies having been given any status.
LTV also reports that KNAB office was visited by ex-board chairman of construction company SIA Skonto Būve Guntis Rāvis, who did not provide any reasons for his visit to KNAB. Aside from those two, KNAB was visited by LNK Group board chairman Artjoms Milovs. However, according to LNK Group, his visit was associated with the case related to the 2016 Island Bridge reconstruction case, not the recent cartel scandal.

LTV also noticed how the lawyer of the scandalous businessman Māris Martinsons arrived at KNAB office around noon. It is worth mentioning that the aforementioned gentleman is involved in multiple criminal processes. His lawyer did not say if he had arrived at the office of the law enforcement institution to defend his client.

As previously reported, KNAB announced on Tuesday, 3 September, that together with Competition Council the bureau commenced court-sanctioned investigative activities in offices of multiple well-known construction companies in Latvia. The reason for this is the suspicion of their involvement in criminal activities and violations of the Law on Competition.

Construction companies Skonto būve, Latvijas energoceltnieks, LNK Industries, Velve, Moduls Engineering and Binders, as well as Arčers have told LETA that KNAB has yet to visit their offices.
Representatives of construction companies Merks and ReRe Group, on the other hand, had initially told LETA that KNAB officers had come, but later clarified that those were representatives of the Competition Council.

Merks representative Jānis Lievītis later explained that the company had been visited by representatives of the Competition Company, who had arrived to speak with Merks board chairman Oskars Ozoliņš.

Merks parent company – Merko Ehitus – mentioned in a statement to Nasdaq Tallinn that its office in Riga was not searched and none of its employees are under suspicion.
ReRe Group board chairman Guntis Āboltiņš-Āboliņš confirmed the visit of representatives of state institutions to his company. Previously he said he was not questioned by KNAB officers, adding that he does not know why they had come.

KNAB commenced a criminal process on bribery and abuse of official power on 19 September 2018.

Competition Council has commenced an investigation of a possible violation of the Law on Competition – involvement in in a cartel agreement.Facts held by KNAB prove possible bribe-giving and bribe-acceptance for possible coordination of prices in procurements. There is also information that points to bribery of officials in exchange for assistance with realization of interests of businessmen with matters not associated with procurements.

Crimes in question were committed between the beginning of 2015 and the middle of 2018. The possible bribe amounts range between EUR 25 000 and several hundred thousand euros.
KNAB has reasons to believe no less than ten of Latvia’s largest construction companies are involved in criminal activities.

At the same time, KNAB has acquired information in the criminal process that points to possible signs of a prohibited agreement among the largest construction companies.
Facts uncovered by KNAB in the pre-trial investigation have been sent to Competition Council, which, after analyzing said information and suspicions regarding possible breach of Section 11 of the Law on Competition, commenced an investigation. To ensure efficient acquisition of evidence in both processes initiated by the two institutions, Competition Council has commenced searches at ten construction companies together with KNAB.

Information held by Competition Council shows that construction companies involved in the process may have coordinated their activities for several years and had agreed among themselves on market division and participation in public and private procurements in both Riga and Latvia’s regions. Cartel agreements are considered the most severe violation of competition rights, KNAB reports.

KNAB and Competition Council will perform independent investigations of this within the limits of their competence.

Competition Council and KNAB are grateful to Latvian State Police Economic Crimes Enforcement Office for their support in the investigation.

Active investigation continues in the criminal process. KNAB promises to provide more detailed information once it is safe to do.


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