OREANDA-NEWS. December 29, 2010. Joint stock company „Latvijas kugnieciba” (LK) apologizes to its shareholders and informs that because of emergency conditions due to which the shareholders’ meeting of 17 December 2010 cannot be held, the LK extraordinary shareholders’ meeting tomorrow will not take place and is postponed to 28 January 2011. LK carries out all necessary activities to inform all its shareholders about the emergency situation through a wide range of mass media – TV, radio, Internet and printed media. LK cannot exclude possibility of deliberate malevolence to intrude upon proper course of the shareholders’ meeting at the venue duly announced by the LK Management Board. That is suggested by suspicious coincidences when during the last twenty-four hours emergency situations have occurred in several LK Groups companies.

To serious long-term damages of electric power supply devices on 16 December 2010 due the previously announced LK extraordinary shareholders’ meeting in the conference and recreation centre “Lejastiezumi” in Renda Rural Municipality, Kuldiga district on 17 December 2010 shall not take place. LK extraordinary shareholders’ meeting is postponed to 28 January 2011, and will be held in Ventspils Business Centre, 23 Ostas Street, Ventspils. Extraordinary shareholders’ meeting shall begin at 10:00 AM, registration of shareholders – from 9.45 AM. Agenda of the meeting will include all the previously announced issues: approval of annual reports for the year 2009; distribution of the profit for the year 2009; election of the auditor for the audit of the annual reports for the year 2010; approval of amendments to the Articles of Association; election of Supervisory Council; recall of audit committee and election of a new audit committee.

Information available to LK states that several persons in crossovers this week visited the venue of the planned shareholders’ meeting and were inquiring, whether the conference centre territory is perimeter guarded and has night vision surveillance cameras. These visits were obscurely followed by sudden damage of the electric power supply devices disconnecting the venue of the meeting from all kinds of communication and causing suspicion of a deliberate sabotage.

But in Riga, in another property of the LK Group – business centre “Daugava”, at 3 Balasta dambis, yesterday, late on 15 December 2010 the fire-alarm was activated and burning was stated. Police and fire brigade were called immediately. At the moment the LK security department is assigned to carry out official inspection of both mentioned accidents in order to decide upon necessity to appeal to law enforcement institutions. 

In this context the inadequate authorisation granted to LK largest shareholder’s JSC “Ventspils nafta” (VN) authorised representative Lauris Liepa that does not comply with provisions of the Civil Procedure Law of the Republic of Latvia, and was used to try to achieve involvement of large LK financial resources in legal proceedings against LK Supervisory Council and Management Board members looks ambiguous. We would like to emphasize that in case of bringing of an unjustified action LSC would have to repay all losses resulting from such case, starting with state duty of more than LVL 170 000. Bureau of L. Liepa represents interests of the former LK Management Board member Valerijs Godunovs, who is a suspect in defrauding LK of approximately USD 100 million and a companion of former LK Supervisory Council member Olegs Stepanovs who is involved in the said case. Unofficial information states that V. Godunovs, likely, is promoted by VN to a position in the LK. VN, whose largest shareholder publicly calls itself an international and honourable investor has not deemed necessary to observe the stock exchange Principles of Corporate Governance and to nominate and publish its candidates to the LK Supervisory Council in due time. VN has neither made public its candidates to the audit committee.

We would like to remind that one of the suspicious candidates to the LK shareholder’s status is the offshore company “International Baltic Investments Ltd.” (IBI) that claims to be LK shareholder and regarding the property rights to the LK shares of which an action has been brought. LK has already informed that the United Kingdom’s High Court of Justice, Queen’s Bench Division, Commercial Court in May 2010 ruled that a number of offshore companies, connected with former JSC “Latvijas kugnieciba” officials, that are defendants in a case in which they are accused of defrauding LK of approximately USD 100 million must post security in the amount of USD 40 million, or make over more than 55 million LK shares in favour of LK and pay an additional USD 20 million as security for the claim being brought against them by LK. The ruling by the British High Court applies to the confiscation of LK shares on behalf of LK which are currently nominally held by IBI, which is connected to Martins Kveps and Arnis Nicgalis, the attorneys of Olegs Stepanovs.

LK also reminds that its largest shareholder is VN, not the Vitol Group that is related to the Cyprus offshore company “Euromin Holdings (Cyprus) Limited” and has usurped the rights to speak on behalf of all VN shareholders and today has spread public statements doubting the chosen venue for the LK shareholders’ meeting at “Lejastiezumi”. LK categorically stands apart from these statements and informs that formerly this conference centre was owned by VN and VN has held several of its shareholders’ meetings there. After conclusion of the VN real estate object sales transaction with LK this centre belongs to LK, and the meeting was organised there with the aim to save LK financial resources. Ventspils Business centre where in January next year it is planned to hold the shareholders’ meeting also belongs to LK and was chosen due to money-saving purposes.

The registration time at the venue of the meeting was chosen by analogy with the LK shareholder’s VN determined time limit in its own shareholders’ meetings that up to now has been sufficient for registration of all shareholders.