After getting acquainted with the joint stock company’s “Ventspils nafta” announcement published on 12 October 2010 by JSC “NASDAQ/OMX Riga”, JSC “Latvijas kuģniecība” (Latvian Shipping Company (LSC)) repeatedly states that it will continue its operation in order to ensure execution of all, more than 5000 company’s shareholders’ interests, and not the unfair plans of one group of shareholders led by self-interested interests. LSC is also forced to yet again inform all investors that JSC “Ventspils nafta” in its public announcements distributes flat-out lie.

 

JSC“Latvijas kuģniecība” cannot and may not ignore the fact that LSC attorneys in the United Kingdom have revealed new facts in relation to the LSC initiated court proceedings about defrauding of more than USD 100 million from the company during 2003-2005. The information available to the LSC attorneys allows to conclude that possibly also companies of “Vitol Group”, which at the moment controls one of the LSC shareholders – JSC “Ventspils nafta”, were involved in the large-fraud schemes that via fraudulent agent companies were established by former LSC officials, including current member of JSC “Ventspils nafta” Supervisory Council Oļegs Stepanovs. Thus according to the LSC attorneys’ opinion “Vitol Group”, who on behalf of JSC “Ventspils nafta” tries to position itself as a model Western business company, has probably gained illegal profit in amount of several millions of dollars at the expense of LSC.

 

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

 

The publicly available information in international press on business activities of “Vitol Group” approves that this owner of JSC “Ventspils nafta” shareholders has never been fastidious about its activities, thus, for example, in November 2007 in the Court of the State of New York “Vitol Group” recognised itself guilty for bribery of Iraq officials and agreed to pay USD 13 million to the Development Fund for Iraq, but USD 4.5 million in this regard were transferred to the account of New York City and State of New York.

 

Unfortunately, we have to state that officials of JSC “Ventspils nafta” continue issue of public lie regarding the Management Board of LSC. Against the JSC “Ventspils nafta” current statements of non-existence of such plans it is the draft amendments to the Articles of Association that were initiated by JSC “Ventspils nafta” and submitted to LSC that prescribe implementation of the mechanism for reduction of number of Supervisory Council members and discriminates the state’s rights. This fact serves as another argument to be highly cautious and sceptical regarding any announcement of the JSC “Ventspils nafta”. We yet again would like to remind that one of the LSC shareholders – the state of Latvia – categorically requires that even the possibility to review such illegitimate issue that breaches the LSC Privatisation Regulations is not permitted, whereby LSC was forced to act by postponement of the extraordinary shareholders meeting of 8 October 2010, the agenda of which included the illegal amendments to the LSC Articles of Association initiated by JSC “Ventspils nafta”.

 

LSC would also like to remind that against the abstruse hysterics stirred up by the JSC “Ventspils nafta” the majority of LSC Supervisory Council members are representatives of JSC “Ventspils nafta”, but member of the LSC Management Board is a representative of the JSC “Ventspils nafta” shareholder “Vitol Group” Paul Thomas.

 

 

 

Additional information:

Ģirts Apsītis

Adviser of the Chairman of the Management Board

Latvian Shipping Company

Phone: +371 67020126

E-mail : ir@lscgroup.lv