JSC Ventspils nafta (VN) points out that the announcement of the associated company JSC Latvijas Kuģniecība (LK) on postponement of the shareholders’ meeting of December 17, 2010 has no grounds and such action of LK is not valid. The Management Board of LK is flatly avoiding to convene a shareholders’ meeting, thus hoping to prevent re-election of the Management Board and Supervisory Council that has been requested by shareholders and is planned in the meeting.

The LK Management Board has deliberately and purposefully created a situation where the meeting is repeatedly held back. At first the meeting was transferred from the centre of Riga to a middle of woods, and then nonspecific considerations about “extraordinary conditions” were alleged, which certainly constitutes grounds for shareholders to require to evaluate whether the actions of the LK Management Board are legal.

Moreover, by avoiding and holding back convocation of a meeting for such a long time (11 months since the first initiative of shareholders to convene a meeting), the Management Board is unlawfully taking up functions of a shareholders’ meeting. This is an unprecedented case in Latvian history when shareholder rights are grossly infringed in a publicly quoted company. Shareholders are anticipating a serious reaction of authorities supervising the securities market.

It is known that VN has required LK to convene an extraordinary shareholders’ meeting already since early 2010, yet throughout the whole year LK has failed to ensure that rights of its shareholders are observed by convening a shareholders’ meeting.

Due to the above mentioned facts, criminal proceedings are initiated on abuse and breach of powers. LK Management Board is avoiding organization of a shareholders’ meeting to deny shareholders the possibility to receive information on the actual financial position of the company and to avoid claims being pursued against the officials of LK, because VN submitted a request to the LK Management Board to include in the agenda of the shareholders’ meeting an issue on initiation of proceedings against members of the Management Board and Supervisory Council for causing damages to the company.

Ventspils nafta

Zane Bojāre
JSC „Ventspils nafta” PR Manager
E-mail: zane.bojare@vnafta.lv
Phone.: 67821691; 29706733