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Latvian prime minister declares Latvenergo council’s dismissal a political decision

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Latvian Prime Minister Krišjānis Kariņš (L) and Economy Minister Ralfs Nemiro (R)

The changes exacted in the council of Latvia’s energy giant by Economy Minister Ralfs Nemiro were a political decision. However, the possibility of the minister’s dismissal is not on the table, said Latvian Prime Minister Krišjānis Kariņš in an interview to Latvijas Radio programme Krustpunktā on Wednesday, 3 July.

The prime minister said during his interview that he saw no reasons to have Latvenergo’s council replaced. Nevertheless, the economy minister had all the rights to make such a decision.

At the same time, Kariņš said he is confident that after replacing the council no temporary Latvenergo council should have been appointed, as councils tend not to be temporary. «I can see it was more likely a political decision,» said the prime minister.

He also said he is satisfied that the temporary council in Latvenergo decided to step down. This way Latvenergo is no longer governed by a politically-approved council.

«Everything has returned more or less on the right track,» said Kariņš, adding that the government will not view the possibility of dismissing Ralfs Nemiro.

Kariņš was critical about what Economy Ministry’s state secretary Ēriks Eglītis had said – that it may be prudent to appoint another temporary council that would supervise the work done by the company’s board.

«This is not an option. If need be, state secretaries of other ministries could be delegated to work in Latvenergo council,» said the prime minister.

The head of the government also said it is important to consider securing professional governance of state companies, which could be accomplished by quoting company shares at a stock market. The prime minister says 10-15% state companies could be allowed to quote shares on stock markets.

As it is known, at the beginning of last week the prime minister requested the economy minister to explain his reason for dissolving Latvenergo’s council and appointing a temporary council. Nemiro’s representative Beata Jonite explained that the minister had met with the prime minister and had presented his reasons for dissolving Latvenergo’s council and appointing a temporary council last week. Details of the minister’s report remain undisclosed.

The dissolved council included the following members: DNB Bank governor in Latvia Andris Ozoliņš, Latvian national airline airBaltic board member and Slovakian citizen Martin Sedlacky, Economy Ministry’s ex-deputy state secretary and ex-chairman of Riga International Airport Andris Liepiņš, Finance Industry Association’s (previously known as Latvian Association of Commercial Banks) ex-president and State Real Estate council member Mārtiņš Bičevskis, as well as ex-board chairperson of RB Rail Baiba Rubesa.

A temporary council was appointed after the old one was dissolved. Rebenoks was appointed as its head. Rigensis Bank board member Renārs Degro was appointed as deputy chairman. Other council members include Inese Kublicka, Artūrs Šnoriņš and Kristaps Stepanovs.

Following political pressure, however, Nemiro’s appointed temporary council stepped down on 1 July. Certain coalition politicians had voiced criticisms in relation to the way the temporary council was appointed and its members’ suitability for their posts.

Economy Ministry’s state secretary Ēriks Eglītis became the CEO of Latvenergo’s council. Nemiro had previously said that a new personnel selection process was launched following the dismissal of the last council. The details of the selection process are being worked on now. The minister predicts the process could take a couple of months until a new council has been composed for Latvenergo.

Latvenergo is company that produces and sells electrical and heating energy, as well as natural gas trade and electricity transmission services.

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