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Minister wonders if money for ex-LDz board members counts as resource squandering

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Latvian Railway board chairman Edvīns Bērziņš (L) and Latvian Railway vice-president Aivars Strakšas (R)

Latvia’s Transport Minister Tālis Linkaits intends to ask the shareholder of Latvian Railway (LDz) to check if payment of compensation to ex-LDz board chairman Edvīns Bērziņš and board member Aivars Strakšas for early termination of work relations can be considered squandering of state resources, as journalists were told by the minister on Monday, 29 July.

«The size of compensation is the topic of discussions between the council and the board. Considering the information I have come across, I will ask the shareholder to check if agreements match details listed in the law on squandering of state and municipal resources,» says Linkaits.

At the same time, he said he cannot comment the size of compensations.

When asked if compensation amounts are too high, Linkaits said: «This requires an assessment».

TV3 News, referencing information available to the programme, reported that the two will receive lay off compensation in the size of an annual wage. According to Bērziņš’s declaration for 2018, he earned EUR 147 000, and Strakšas earned EUR 128 000 last year.

Linkaits also notes that he cannot say the size of planned compensations could be the reason why Bērziņš and Strakšas decided to step down. According to the minister, this question should be asked to the two of them.

«I believe we have to look forward. We have to turn this page. We move forward and we look for a modern board that would do everything necessary to meet goals of the government’s action plan,» said the minister.

When asked about the board members selection process, Linkaits said it would be best to pick new members internationally and using a good personnel selection company, because LDz should be made a modern company that supports people and clients’ interests. ‘There are many structures and work principles, which is why the company requires a capable leader with a good vision,’ said the minister.

Transport Ministry’s acting state secretary Džineta Innusa is the shareholder in LDz.

On Thursday, 25 July, LDz council decided to terminate work relations with Bērziņš and Strakšas. The two will leave their posts on 12 August. Ēriks Šmuksts and Ainis Stūrmanis, on the other hand, will continue working in the company’s board.

«Considering that a situation has formed when there is no active dialogue between the heads of the company, the ministry and the company’s board, the decision has been made to put an end to this uncertainty and start moving forward,» LDz Council chairman Jānis Lange said after a meeting.

As previously reported, on 7 May Linkaits voiced no-confidence to Bērziņš, Strakšas and Stūrmanis. He asked the LDz council to dismiss the three officials. Stūrmanis remains in his post.

The minister stressed that the main points of criticism are associated with possible distortion of competition, which threatens with serious consequences for LDz and the country.

The ministry received information about possible corruption. This information was later forwarded to Corruption Prevention and Combating Bureau (KNAB). Multiple financially large economic transactions, including marketing and advertisement contracts worth several million euros were found, which leads to believe the board has not acted as a serious and careful manager.

LDz board members announced that Linkaits’ statements about the company’s management were aimed at preparing the company for privatization. Bērziņš and Strakšas also asked State Police to commence a criminal process against Linkaits for defamation.

LDz is a public use railway infrastructure maintenance company and the leading company of Latvian Railway concern. The company has six subsidiaries – LatRailNet, LDz Cargo, LDz Infrastructure, LDz Rolling Stock Service, LDz Security and LDz Logistics.


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