Information available to JSC “Latvijas kuģniecība” allows to come to a conclusion that the illegitimate plans to take over the company and its assets by force have originated within the group of shareholders, who are involved in the LSC defrauding schemes and who in the interests of “Vitol Group” are represented by the JSC “Ventspils nafta”, but in the interests of former member of the LSC Supervisory Board Oļegs Stepanovs – by company „International Baltic Investments” (“IBI”). According to the most recent information received from United Kingdom, where the final stage of the LSC initiated court proceedings about defrauding of more than USD 100 million from LSC is being held, both “Vitol” and “IBI” are interested in taking over of LSC in order to attempt to prevent the unpleasant and inevitable consequences that they will face along conclusion of the court proceedings already in the nearest future.

 

Yesterday, on 7 October 2010 lawyers of the LSC submitted to the United Kingdom’s High Court of Justice, Queen’s Bench Division, Commercial Courtmember of the LSC Supervisory Board Oļegs Stepanovs. During the court proceedings in the United Kingdom it was found that companies of the “Vitol Group” that is co-owner of the LSC shareholder JSC “Ventspils nafta” have been involved in the large-fraud case as clients of the former LSC fraudulent agent firms and have illegally received several millions dollars from LSC. These facts recently came to light in the London High Court after LSC changed its representing Law office in United Kingdom to another Law office from the same country. a supplement to the case of defraud of USD 100 million, asking to appoint as defendant along with several offshore companies also an individual person – former

 

LSC has already informed that defendants have admitted defraud of assets from LSC, but against the court ruling did not post the security in amount of several millions US dollars, thus losing their rights to further litigation and are actually found guilty; the court continues to decide upon recovery of particular sum for the benefit of LSC. In the legal proceedings which were brought in the United Kingdom at the behest of LSC, the defendants consist of five offshore companies – “Recoletos Limited”, “Romanica Overseas Limited”, “Skeena Overseas Limited”, “Luzero Limited” and “Chandler Limited”, which are linked to former LSC officials including Oļegs Stepanovs, Valērijs Godunovs and Alvis Akmens, and which are the defendants accused of unlawfully concluding more than 60 ship chartering transactions for artificially low rates from 2003 - 2005, thus inflicting losses in the amount of USD 100 million on LSC. During the course of legal proceedings, the representatives of the defendants have admitted that approximately USD 12.5 million dollars have been spent on bribes to companies in Russia, Ukraine and Belarus to ensure the successful implementation of the fraud scheme.

In turn, criminal proceedings have been brought in Latvia regarding these unlawful transactions in which several former senior LSC employees have been classified as suspects. As the management of LSC was informed recently by representatives of its shareholder JSC “Ventspils nafta” two senior managers of “Vitol Group” Paul Mulholland and Jeffrey Martz have received summons from Latvian law enforcement bodies to give explanations.

The aforementioned information indicates evident illegal business connections between the accused LSC officials and “Vitol Group”, as well as most likely explains the attempts of this group of shareholders to ignore the rights of the Latvian government to manage its property – LSC shares – in the company’s Supervisory Council.

 

JSC „Latvijas kuģniecība” reminds to its shareholders, stock exchange JSC “NASDAQ OMX Riga”, securities commission and law enforcement bodies that the JSC “Latvijas kuģniecība” extraordinary shareholders meeting that was due to be convened on 08 October 2010 will not take place as it has been postponed to 17 December 2010. The management Board of JSC „Latvijas kuģniecība” indicates that it has not drawn up a list of shareholders for the extraordinary shareholders meeting of 08 October 2010, thus any attempts to hold the JSC „Latvijas kuģniecība” shareholders meeting are to be regarded as illegal.

JSC “Latvijas kuģniecība” reminds that the planned extraordinary shareholders meeting was postponed taking into account the explicit objections of one of the shareholder’s – state of Latvia – representative State Social Insurance Agency against amendments to the JSC “Latvijas kuģniecība” Articles of Association that were proposed by JSC “Ventspils nafta” and included in agenda of the meeting, and that according to the Agency’s opinion foresee outright ignorance of the state interests and thus coarsely breaches the JSC “Latvijas kuģniecība” Privatisation Regulations. State Social Insurance Agency has requested to not to permit review of such illegitimate amendments and discrimination of the state interests. A similar position in the notification that was released yesterday, 6 October 2010, to the Prime Minister and the Minister of Economics expressed the Minister of Welfare appealing to the government officials not to permit even the possibility to review such illegitimate amendments to the Articles of Associations that endanger the state interests.

Management Board of the JSC “Latvijas kuģniecība” will continue its operation in order to ensure execution of all shareholders’ interests pursuant to provisions of the law and other regulations.

 

JSC „Latvijas kuģniecība”  addresses all responsible Latvian institutions and officials inviting them to stop and not to permit spreading of the so-called “black rider” business methods in Latvia, when several shareholders or a group of shareholders without any legal justification take over a company that belongs to all its shareholders, as it has happened, for example, in the case of JSC “Ventbunkers” and as it regarding the JSC “Latvijas kuģniecība” is intended by representatives of both the “Vitol Group” and O. Stepanovs.

 

 

 

Further information:

Ģirts Apsītis

Adviser of the Chairman of the Management Board

JSC „Latvijas kuģniecība”

Phone: 67020126

E-mail: ir@lscgroup.lv