BNN reports:

In December 2012, Judge Melina of the Riga Centre District Court became famous when she ordered some legally impossible provisional measures against two of the richest companies in Latvia.

She ordered that these companies could not anymore register any changes in the Register of Enterprises unless some minority shareholders (Olegs Stepanovs’ company Topmar with less than 13% of the votes in the case of Ventbunkers and Stepanovs’ Lawyer Alekseys Ovods with less than 0.1% of the votes in the case of LNT) would give their consent to the registration. Many people asked with which means of doubtful legality she could be convinced to do something impossible like this.

But then, the Senate of the Supreme Court of Latvia ruled that provisional measures of this type are generally impermissible in commercial litigation. The Supreme Court’s ruling was notified to Melina. Everybody expected that she would follow the higher Court’s ruling and lift the impossible measures. But on 15 March 2013 judge Melina did the opposite and refused to lift the provisional measures. Her struggle to distinguish this case from the one handled by the Supreme Court can be viewed as artificial and bringing embarrassment to the legal community in her defiance to brush away the position taken by the Supreme Court.

….

and refers to a press release published by AS Ventbunkers press service the previous day:

inf130319-judge-Melina-Ventbunkers-EN

The article in the portal of BNN reports this threat with reference to inside sources.You can find the original English Article here.

There is also a Latvian and a Russian Version of this article available.

The full length article can be found in the BNN portal in English, Latvian and Russian.

Read an abstract here …

Meroni-led companies show good performance

August 7, 2012

Companies led by Rudolf Meroni show good performance in terms of turnover and profit, which he himself describes as very successful. To give an example, Ventbunkers profit is up despite dropping amount of cargoes.

Rudolf Meroni

Back in 2010, Ventbunkers’ turnover reached 41.1 million lats, compared to 36.1 million lats in 2009. Whereas, compared to 3.4 million lats made in 2009, the company’s profit hit 6.7 million lats in 2010.

Besides, last year Ventbunkers signed a contract with Mercurio for a record rate – 8.10 euro cents per ton. It should be added that back when Olafs Berkis was in charge of the company, the same tariffs reached mere 2.55 euro cents.

Similarly, also the company Baltijas Ekspresis’ net profit is up 38%, totalling 1,7 millions lats.

Also potassium salt transhipment company Kalija Parks shows good performance – its profit before provisions and tax reaches 925 000 lats.

Last year transit company AS Ventspils tirdzniecības osta’s turnover accounted for 26.64 million lats. It is an increase of 9.6% over 2010, when the company turned 24.31 million lats. Profit is up 57% from 353 171 lats in 2010 to 554 580 lats in 2011.

It should be noted though that last year was not that successful for Ventbunkers, because the Russian concern Lukoil’s subsidiary Litasco had blocked its terminal and railways. It is exactly for this reason why the company failed to meet expectations – 11 millions lats.

Such Litasco’s activities pushed Ventbunkers into a loss of 28.19 million lats, so in late 2011 Meroni-led Ventbunkers management prepared a claim against Litasco to compensate for damages. If the amount was recovered, the company’s profit performance would be impressive.

The full length article can be found in the BNN portal in English, Latvian and Russian.

News articles on this issue can be found e.g. in Baltic News Network. Read there in English or LatvianAbstract of the article published in BNN on August 3rd, 2012 with reference to Aivars Gobins:

Dzintars Kass disgraces himself over trumped-up charges

August 3, 2012

The Ventspils prosecutor Nadezda Jakusonoka on July 24, 2012 dismissed alleged charges of intentionally concealing information from the tax authorities (Art. 217, Subsection 2 of the Criminal Code) against the legitimate Ventbunkers management board members Alvis Haze, Janis Haze and Mihhail Dementjevs. Thereby she rejected false accusations and established that their activities had no nature of offence in accordance with this clause.

An investigation against the legitimate Ventbunkers Management was initiated in March 2012 by the false «Berkis Management» of Ventbunkers with the Latvian Finance Police on the basis of misrepresented facts submitted by the false Ventbunkers Chairman, Dzintars Kass. It is loudly rumoured that a big brown envelope was involved and methods of doubtful legality were applied to «convince» the Finance Police to start an investigation. In late December 2011, Berkis and his puppets had reached a false registration in the Commercial Register by criminal methods based on falsified documents prepared by the master of falsified shareholders meetings, Martins Kveps.

The Ventspils Prosecutor Jakusonoka’s decision proves that Kass and his sponsor, the controversial and to the ruling party’s Unity «black funds» related Ventspils’ millionaire Olafs Berkis, had spread false information about the legitimate Ventbunkers Management. False documents were used by Berkis and his accomplices to obtain a false registration of management positions in Ventbunkers to which they were never elected in a legal way.

Read on in Baltic News Network englisch Version

Riga, Latvia: On December 28, 2011, an associate of Martins Kveps’ law firm once again submitted to the Register of Enterprises brutally falsified documents of a Shareholders’ Meeting, which never took place and which had never been convoked. This is the fifth attempt of the notorious Kveps to illegally seize control of the company Ventbunkers, one of the most important enterprises involved in the Oil Transit Business in the Latvian port of Ventspils.

On June 27, 2011, the legitimate Management Board of Ventbunkers convoked a Shareholders’ Meeting to take place on December 20, 2011. The legitimate Shareholders of AS Ventbunkers properly carried out this Shareholders’ Meeting. More than 70% of the Shareholders were represented at the Meeting. The results of this legitimate Shareholders’ Meeting were submitted to the Register of Enterprises and properly registered on the following day.

But then, three days later, on the 23rd of December 2011, Martins Kveps dared to try to hold another Shareholders’ Meeting of Ventbunkers, which had never been convoked by the Management Board and never took place. From the list of participants, it becomes obvious for whom Kveps made this brutal falsification. Kveps represented the company Topmar Baltic Investments, beneficially owned by Oleg Stepanov. Janis Berkis represented the company Kement, owned by his father Olaf Berkis. Additionally two other companies, Steropes Limited and Gyges Limited, participated even though they are not and never were shareholders of A/S Ventbunkers. These two companies belong to Igors Skoks and Gennady Shevcovs respectively. However,  the most intriguing  detail is as follows:  Liga Lemberga,  Anrijs Lembergs and Optima Management also participated in the false meeting. It is well known that these three Shareholders are acting in the interest of Aivars Lembergs. Therefore, it is equally obvious that Lembergs also stands behind this brutal falsification.

The time of false and illegal corporate actions seems not to be over yet in Latvia. With a simple and criminal falsification, such as was made by Kveps and his cohorts, it seems to be possible for anyone to submit documents to the Register of Enterprises, have them registered and give the (wrong) appearance to the public of changes to the legitimate management of a company. Ventbunkers is submitting a criminal complaint to the investigation authorities. It is hoped that the General Prosecutors’ Office will intervene and stop such brutal falsifications and criminal acts from reoccurring in the future.

Martins Kveps brutally falsified another Ventbunkers’ Shareholders’ Meeting with the involvement of Lembergs

BNN received an e-mail the other day: “Dear Sirs! To me BNN is like a tribune. A tribune that asks the questions some influential people would rather not reveal to the general public. Some of the questions asked cover the so called “transit wars”. I am deeply concerned about the upcoming “assault” of an enterprise that so far courageously held off the “Ventspils Commandant”. I would appreciate if you would kindly publish my opinion on this matter.” BNN kindly does what our reader asks.

Some people are familiar with the classic Business capture scheme of the early 90s from detective stories, some from detective serials on TV: bulky lads in wearing sportswear persistently offered their protection services for an ungodly amount of money to an owner of a small shop, or stall. And after the debt for “security services” grew equal to the value of the enterprise altogether, the “friendly” protectors claimed ownership over it and transformed from regular criminals into – respected businessmen.

This little scheme is what comes to mind when you’re reading reports in press about probable insolvency declaration of the largest mineral fertilizer transit terminal in Europe, the second in the world – “Kālija parks”. Even though the “protectors” have long since traded in their sports trousers for some expensive suits, even though the year round revenue of the “small shop” is accounted in six digit sums, even though the scales of pulling off something like this is hardly easy; you still accurately notice that familiar pattern.

Furthermore BNN reports that:

So, the lawsuit about declaring that company insolvent came from the «ТМ Security» security firm (the same «ТМ Security» that hit the spotlight in 2010 during dramatic events around “Ventbunkers”.The ones where police were forced to neutralize a number of «ТМ Security» employees, so that the owners of “Ventbunkers” would finally be able to access their administrative building).

You’d think who cares about some dispute between some millionaires, over “who” owns “what”? So what some high ranking VIP bark on and on at each other and unleash their “hounds” with guns and lawyers with their convoluted claims? …How does this involve rest of the people in Latvia?

Let’s not haste to judge. The time to put a squeeze on “Kālija parks” couldn’t have been chosen any better. The company is now engaged in negotiations with prospective partners, and the latter may prove to be sensitive to that kind of scandals. And if the contracts are not signed – instead of a false, provocative bankruptcy, a very real bankruptcy might occur. And then, about 200 employees maintaining the terminal, employees of the businesses working in cooperation with “Kālija parks” – will end up out on the street. Consequences for Ventspils will be great, for Latvia – catastrophic.

The reputation of Latvia as a reliable transit corridor could suffer the most. A country where a small security firm can effectively paralyze the work of one of the largest enterprises in its field of business, a country where raider activity has become a profitable business, a country where bulky men in masks take active part in ownership disputes – does not sound like a good place where to start your business. Transit terminals in our neighbor countries wait in line for fertilizer supplies from Russia. And why not? Russian businessmen can choose either Lithuanian or Estonian ports for transit. The story behind the reduction of freight turnover for the last decade or so in Ventspils reflects this perfectly.

The fall of one large enterprise because of some criminal showdown can cause a chain reaction. And that would cease being a problem for one city it would become a problem for the whole country. Do the people behind the “Kālija parks” bankruptcy claims understand this? I’m sure they do, even better than we do in fact! However putting the remains of a ruined transit business in their pockets is far more profitable than letting that said business to function normally, but not under their control.

As the saying goes, I suppose, “If I don’t get some – no one does!”

P.S. on behalf of BNN: according to our internal rules, our news agency does not publish the names of the authors of the articles. The information about the author is stored in our editorial.

We can add only the fact that “Kālija parks” actively challenges the existence of any debts to both «ТМ Security» and Martins Kveps in both the Regional Court of Kurzeme and the Supreme Court of Latvia. On the 14 of December the Supreme Court of Latvia will review the claims made by “Kālija parks”. «ТМ Security» on the other hand, acting like it does not notice these claims, has initiated a case at the Regional Court of Kurzeme. It also seems that judge Lucava, even having access to the judicial system database, paid no attention to the core of the problem and initiated the “Kālija parks” insolvency process. And doing so unknowingly created an obstacle. In accordance with the Latvian legislation system an insolvency process cannot be used in a case involving debt return.

Even though the employees of «ТМ Security» joined the ranks of Zatler’s Party of Reforms, even though they claim to respect Latvian laws – reality is that «ТМ Security» shows its contempt for the law quite clearly.

What do some banks have in common with some attorneys? You can trust neither of them. In the banking business we see this in Krajbanka collapse, dragging down also the bank’s professional reputation. The portal www.pietiek.com informs about another case, which could lead to a similar outcome, but in the profession of an attorney.

Latvian Council of Sworn Advocates (CSA) will decide on Tuesday, December 6, whether to launch a disciplinary action against the sworn attorney Martins Kveps. The case could round up with Kveps being excluded from the circles of sworn attorneys, CSA Chairwoman Guna Kaminksa told Pietiek.com.

Kveps is reproached for failure to comply with the client’s interests and conflict of interest. The CSA has already asked an explanation from Kveps, while the attorney himself refused any comments to Pietiek.

The complaint was submitted on November 11 by the potash company Kālija parks, which stresses that back in April 2010 Kveps pretended to represent their interests. Thus, he tricked Kalija parks into signing an unadvantageous contract with the security company TM security. Based on these unadvantageous conditions, TM security is now claiming the Ventspils transit company’s insolvency. Kalija parks instead claims that it has evidence to prove that Kveps is in a conflict of interest, because he represents also TM security.

The whole story stems from April 2010, when Kalija parks slipped out of millionaire Oleg Stepanov’s hands and was taken over by the Swiss lawyer Rudolf Meroni. This was followed by attempts to keep the company with the help of TM security – just like in the case of AS Ventbunkers.

Kveps, who is linked with the interests of Stepanov, was then representing AS Kalija parks majority shareholders. He talked the company into signing a contract with the security company TM security. Kveps promised that the contract will be in force only for a single day – the one of the shareholders meeting. Actually, the contract remained in force and TM security employees stayed in the territory of Kalija parks despite the management’s objections. The contract developed by Kveps foresees that Kalija parks has to pay 25% of the total sum for each delayed daily payment. Similalry, Kalija parks is supposed to pay TM security a 100 000 lats compensation if the agreement is terminated.

The severe contractual conditions are not the only reasons why Kalija parks claims that the sworn attorney actually worked in the interests of the other party. “It is possible to conclude from SIA TM security’s words to AS Kalija parks that “Mr. Kveps will take care of everything”, as well as the severe conditions that Kveps acted in the interests of SIA TM security. Thus, not only did he ignore AS Kalija parks‘ interests, but also allowed the conflict of interest to enter his professional work,” it is said in AS Kalija parks‘ complaint to the Council of Sworn Advocates. What is meant here is TM security board member Markes Varnelis’ statement that “Mr. Kveps will take care of everything.”

“On April 29, 2010, Kveps was considered to be a sworn attorney working in the interests of AS Kalija parks, not providing legal assistance to SIA TM security. Only later it became known that Kveps had made ill use of trust in order to carry out other interests. He provided AS Kalija parks with misleading and false information, so that its board members would act without checking his words and in the interests of the third party represented by him,” it is said in the complaint that the CSA is about to review on December 6.

The complainants believe that Kveps’ “professional activities are violating the key principles of ethics. They dishonour not only him alone, but also cast the shadow of distrust to the profession of lawyer as such.” Therefore, the Kalija parks is asking the CSA to launch disciplinary action against Kveps on the grounds of “blunt violation of ethical norms in his professional work.” Kalija parks urges the CSA to dismiss Kveps from fulfilling the duties of a sworn attorney. According to the company, it is an appropriate punishment, because, given the attorney’s violations, he could be imposed the most severe punishment – exclusion from circles of sworn attorneys.

Society “BALTIC ASSOCIATION – TRANSPORT AND LOGISTICS ‘notice

Association “BALTIC ASSOCIATION – TRANSPORT AND LOGISTICS (BATL) warns that the Ventspils Freeport Authority (VBP) activity against AS” Ventspils Grain Terminal (VGT) once again shows that the Ventspils Freeport work is needed sea change. AS “Ventspils Grain Terminal” is a company with 100% capital of investors in Kazakhstan, the Latvian Republic profitable and promising project of Kazakhstan and Latvian economic cooperation. This success of the project to become a reference for other countries for investors to invest in the Latvian national economy. I must agree with the Minister of Economics Artis Kampars in Ventspils Freeport behavior was characterized by the words “irresponsible, uneconomic, anti-government”.

BATL, whose members are the largest businesses operating in the Ventspils Free Port, points out that forced to contend with the Ventspils Free Port of working methods and acceptance of different companies, different, economically unjustified and arbitrary decisions. VBP some extent into a narrow range of people who control the private company, whose main purpose is likely to be no longer a common port development, but to “own” the company increased support for and unwanted coercion. As a result, once famous Ventspils Free Port has turned into a port, which its development has outstripped almost all of the Baltic Sea in the east coast of the big ports. If the mid-nineties Ventspils port transhipped through almost the same cargo volume as St. Petersburg, Tallinn, Riga, Liepaja, Klaipeda port together, today each of them handling considerably over Ventspils.

Press voiced Ventspils Freeport view that AS “Ventspils Grain Terminal” has received the same support as other investors. BATL confirm that VGT has received aid, but aid and investment projects were approved during the company of JSC “Ventspils Grain Terminal” indirectly controlled by the chairman of the board of Ventspils Free Port. Currently JSC “Ventspils Grain Terminal” 100% representing the Republic of Kazakhstan investors. But Ventspils Free Port Authority by its actions seek to paralyze the work of the terminal. It is not acceptable, not from good management, not the port and the Latvian economic growth point of view and suggest possible corruption at the highest management level of Ventspils Free Port.

Ventspils Free Port is a need for direct government intervention. Going the greatest degree of public accountability and international prestige thing.
Consequently, the BATL turning to the Saeima and the Cabinet with the request of the Ventspils Free Port of regulatory laws and the improvement of legislation:
– Tried to prevent a person being in Freeport composition of the Board, because that in itself degrades the investment climate;
– Review of Ventspils Port Authority board of election, recall of board members and office machines;
– Make the Ventspils Freeport board meetings, decisions and documents relating to those available to its founder and senior representatives of supervisory authorities;
– Prohibit the trial to decide the likelihood and so on.

In conclusion BATL again indicates that the grain terminals will point to the Republic of Kazakhstan (Republic of Kazakhstan) investors in a targeted restriction of Latvian Republic. Although it is only one of the last time Ventspils Port Authority of examples. Unresolved is the situation with the VBP selected, the unknown and doubtful investors, whose name is set out an ambitious Ventspils forest land degradation. It is also unclear why VBP refuses to hold an open competition to the newly built dry cargo terminal operator’s place in the best of our knowledge is one of the conditions for creation of infrastructure to the European Fund for the financing of several tens of million.

Society “BALTIC ASSOCIATION – TRANSPORT AND LOGISTICS ‘view is shared by AS VENTBUNKERS” AS “Ventspils Commercial Port” JSC “POTASSIUM PARKS” AS “Baltic Express”, SIA “iLink” SIA “Port Fleet” and still others working in Ventspils company.

Society BATL
Board Chairman John Jurkans

Additional information:
Galina Moločkova
Baltic Association – Transport and Logistics “”
Tel: +371 67854075
Fax: +371 67854070

Press Release LETA

More articles on this topic can be found in BNN – Baltic News Network:

Latvian: BALT: Ventspils brīvostas pārvalde lobē savus uzņēmumus, nevis valsts intereses

Russian: BATL: правление Вентспилсского порта лоббирует свои интересы

English: BATL – Ventspils Free Port lobbies its companies instead of Latvia’s interests

“Riga, Latvia:  Uldis Augulis, the Latvian Minister of Transportation, held an emergency meeting on February 9th, 2011. The meeting was held to find a solution to the 1700 rail car tankers Lukoil subsidiary Litasco has backing up the Latvian railway system.

The meeting took place at 4 pm in the Ministry of Transportation. Representatives from the Ministry, Latvian Railways (LDZ), Latvian customs authority, Ventbunkers (VBU) and Litasco attended. All parties were summoned to find a solution to the emergency situation on the railways caused by 1700 railcar tankers containing Litasco fuel oil.
…”

The full press release as PDF file: 20110214-VBU eng 14.02.2011

Abstract of this video:
Dr. Rudolf Meroni, chairman of the supervisory board of AS Ventbunkers
explains how business used to be governed in the past and his
efforts to change this for better. Rudolf Meroni also describes
how management is being performed today in AS Ventbunkers – without
black payments, kickbacks and other illegal schemes.

The full transscript of this video:

Question:
Ventspils business practices:
– what has changed?
– what to expect for the future?

Answer:

The business in practice in Ventspils is a rather
unique one. Whereas normally in interantional business
companies there are managers, top managers who have a
very important saying role in how the business is carried
out. This historically was not the case in the business
companies in Ventspils.

There were always managers of different levels but behind
everything, even behind the supervisory boards of the
companies there was always in the past some hidden
shareholders which did in reality decide even the smallest
things in the companies.

So it was not that the managers were real managers in the
past, but they were more or less puppets who had to do
what the big boys, the big shareholders in the background
told them.

I tried to change this system, I tried to come from a
normal western perspective, to try to appoint highly
qualified managers. We did it in the first step mainly
in the company Ventbunkers. We have appointed a management
which is in my eyes highly qualified professionals who do
a very good job and which have a competence to take certain
decisions within the framework of the internal corporate
governance rules.

I believe that these managers who are well paid, I believe
they have a good salary. They do good bonuses as in every
other company, but they have no black payments. They have
just the normal salaries as is normal.

They do their job for the company and they try to do it in
the best interest of the company. I always told them: I
want that all the business is done perfectly clean, everything
is in the balance sheet of the company, no black businesses,
no hidden kickbacks or other things.

I believe that this was for the first time in the last
2 or 3 three years in the company Ventbunkers that we have
operated on such a basis.

I believe the situation is promissing and I believe that
if this is continued for the future, this will be a real
success.

Obviously it is unique, that through  the position I have
been given by the general prosecutors office to control a
number of votes, an important number of votes in these
companies I was in a position to push back the power of
the real shareholders. This obviously not always been
very well received.

You are aware of the difficulties we had with illegal
shareholders meetings, illegal attempts to change the results
of shareholders meetings and obviously this is the
counterpart. The so called hidden shareholders tried to fight back
with this kind of illegal schemes.

For the time being I believe the situation is more or less
under control and I hope for the future that the stability
for the companies will be asured and that we have a good
situation that such are not going to happen anymore.

I can obviously not be 100% sure, but I am optimistic
that for the year 2011 we will not have such illegal attempts
on the current legitimate management of Ventbunkers and other
companies.

Speaker: Dr. Rudolf Meroni for AS Ventbunkers.

Dr. RUdolf Meroni, chairman of the supervisory board of AS Ventbunkers
explains how business used to be governed in the past and his
efforts to change this for better. Rudolf Meroni also describes
how management is being performed today in AS Ventbunkers - without
black payments, kickbacks and other illegal schemes.