OREANDA-NEWS. March 30, 2010. During the last 3 years, the total cost to the company of the 12 members of LASCO Supervisory Council has been more than 5 million lats. For the State of Latvia, as one of the shareholders, the Supervisory Council has created expenses of more than 500 000 lats. In 2009 with estimated losses of the company of around 20 million US dollars, the members of the Supervisory Council received a total of 1 363 065 lats in total compensation. VN, as the largest shareholder of LASCO, stresses that such expenses are totally unjustified in a time of serious economic crisis and with the company operating with substantial losses.

“It seems inappropriate for Supervisory Council members to receive such huge salaries while the performance of the company has been so poor, impacting the returns to all shareholders” says Simon Boddy, chairman of the board of VN.

VN also emphasizes that information in the media concerning VN’s intent to rule out the State from being part of the LASCO Supervisory Council, is totally false. LASCO’s main shareholders are VN with 49,94%, AS INTERNATIONAL BALTIC INVESTMENTS LTD (IBI) with 27,55% share and the State Social Insurance Agency representing the State, with a 10% share. Accordingly, if the LASCO Supervisory Council is reduced from 12 to 7 members, the State would still hold 1 position on the Council, effectively gaining more weight to their voice. Reduction of the Supervisory Council members would also help make a significant reduction to the administrative costs of LASCO .

S.Boddy, commenting further, added: “„Mr Boldiрзvics, as a State representative on the LASCO Supervisory Board, should welcome the State gaining a more important role in LASCO. However, the multiple other positions held by Mr Boldiрзvics are preventing him from fulfilling his role in LASCO of representing the interests of the State. Unless the performance of LASCO is significantly improved, the shares of the State will soon be worthless”.

In order to review LASCO’s financial situation and operations, VN has repeatedly requested an extraordinary shareholders’ meeting be convened. LASCO has ignored these requests and published false information that an extraordinary shareholders’ meeting has already been convened. Since VN, as a shareholder, was not informed of the time and place of such a meeting and no public information on the meeting was made available, such a meeting cannot be considered as having been convened.

As previously stated, VN takes the view that it is in the best interest of all LASCO shareholders to convene a shareholders’ meeting as soon as possible to review the financial performance of the company in 2009 and implement a recovery strategy for the company to become stable and then return to profitability. A profitable company is in the best interests of all shareholders, including the State, which owns 10% of the company through the State Social Insurance Agency.