Direct Speech, Energy, EU – Baltic States, Interview, Latvia, Legislation, Oil, Transport

Over the last few days, in the Latvian media a number of articles have appeared which contain allegations that you, Dr. Meroni, tried to steal an amount of 29 million USD from the company Latvijas Naftas Tranzīts ( LNT)? Is this true or not? What is behind these allegations?

Rudolf Meroni: This is absolutely not true. This is a false defamation campaign, which has been initiated by the criminal group around Martins Kveps. At the end of December 2011, they falsified a Shareholders' Meeting of Ventbunkers. They invented these false allegations against me, trying to divert the attention of the public away from their criminal activities into a different direction, which has nothing to do with the reality. Obviously, this cannot work.

I am the Chairman of the Supervisory Board of LNT. LNT appointed my law firm to represent its interests against a Liechtenstein Trust Company with the name Miselva Establishment (Miselva). For several years, this company Miselva is holding an amount of approximately 29 million USD and refuses to transfer this amount to LNT. Many letters were exchanged. Many meetings have taken place and still, Miselva refuses to transfer the amount to LNT, to which this money clearly belongs. The amount is held in a Liechtenstein Bank with the name Valartis Bank. In order to facilitate the transfer, our law firm opened a special account in the bank. This is not a private account of me for my personal funds. It has been specifically declared to the bank that this as an attorney's account for clients money (in German: Rechsanwalts-Anderkonto). The bank was made aware of the dispute between LNT and Miselva and that the transfer from Miselva to this attorney's account has been requested. Illegally, Miselva continues to refuse to transfer this amount in accordance with the written instructions of myself as a legal representative of LNT and of the Management Board of LNT. Obviously, this may have criminal consequences.

Where did this money originally come from? What is behind this strange behavior of Miselva Establishment?

R.M.: Behind this obvious problem, there is a rather long story. I have to go back to the year 2006.

At that time, LNT was still the controlling shareholder of the Latvian company Ventspils Nafta. LNT held at the time approximately 49% of the shares of Ventspils Nafta. This percentage was enough to control the Shareholders' Meeting. However, beside this, there was another company managed by a certain Mr. Andrew Baker of Miselva Establishment with the name Avenue Emerging Markets Fund Ltd., which also held an additional seven percent of Ventspils Nafta shares for the benefit of a group of individuals, beneficially interested in Ventbunkers and LNT.

In 2006, the management of the company LNT was illegitimately under the influence of the big man of Ventpils. As Ventbunkers is the majority shareholder of LNT, the management of LNT had to fear that the Lembergs' Group would lose control over LNT.

At that point in time, the management under the lead of Mamerts Vaivads advised by the Latvian Lawyer Janis Zelmenis started some doubtful activities trying to illegally divert from LNT the majority control of Ventspils Nafta. They did in the following way: A package of 7% of Ventspils Nafta Shares were defrauded from the company LNT. Without paying a reasonable and fair price, they transferred the 7% Shares with the help of Miselva Establishment and through a Swiss securities trader firm Plenum Securities to some other hidden party. In this context, a so-called “Brokerage Agreement” was signed by the disloyal management of LNT with Miselva. Most interestingly the defrauded shares reappeared in the hands of the Vitol Group. These shares are the basis of the majority control of the Vitol Group over Ventspils Nafta.

An amount of some 25 million USD were paid for the control package of Ventspils Nafta. In reality, this control package would have had a value of hundreds of millions of USD. The money, which was used for this transaction, came from some offshore operations, which were managed by Miselva and Andrew Baker. From these amounts, the defrauded Ventspils Nafta Control Package was paid, but not to LNT, but to a hidden account under the control of Miselva/Andrew Baker. Since 2006/07, there is this money outside of LNT under the control of the Miselva manager Andrew Baker.

When Ventbunkers could take over control over the management of LNT in 2007, LNT requested Miselva to transfer this money to the accounts of LNT. ButMiselva and Andrew Baker refused to do it. In spring 2010, LNT started to intensify its legal efforts to recover this amount still under the control of Miselva. All the time, Miselva refused to confirm their readiness to transfer this amount in accordance with the instructions of LNT.

In November/December 2011, Mr. Andrew Baker again expressly confirmed that he does not follow instructions of LNT to transfer the amount. In this situation, I decided as an Attorney-at-Law, representing LNT, to open a special account in the bank where the money actually was, which is Valartis Bank in Liechtenstein.

I did not open a private account, but a special Attorney's account for clients' money. The bank was informed of this. The bank was also fully informed, that LNT requested the transfer of the amount under the control of Miselva to this special account belonging to LNT. From there, LNT wanted to transfer the amount to selected European Banks with a good standing to keep this important amount of money in a safe place.

When the criminal group initiating the defamation campaign against me says that the money should be transferred to a “private account” of myself, this is a simple lie. It is not my private account, but it is a special account of my law firm to hold clients' money. The bank transfer clearly stipulated that in the German language: it was named that the amount should be transferred to the "Rechtsanwalts-Anderkonto of Dr. Rudolf Meroni".

Who is Miselva Establishment and what is the role of Andrew Baker?

R.M.: Miselva Establishment is a Liechtenstein Trust Company. Its main representative and manager is Mr. Andrew Baker. Mr. Baker has been involved for a long time in some doubtful offshore activities related to certain shareholders of LNT.

Mr. Andrew Baker is also the sole Member of the Board of Directors of the LNT shareholder Global Oil Services, which is registered in New Zealand. The ultimate beneficial owner of this company are Mr. Mamerts Vaivads and Mr. Uldis Pumpurs. At earlier times it was said, that the Lembergs family was also interested in this company. But it may have changed.

Additionally, Andrew Baker is also a director of the company Avenue Emerging Markets Fund which still holds shares of Ventspils Nafta. Four of its beneficial owners (Olafs Berkis, Oleg Stepanov, Igors Skoks and Gennady Shevcovs) are represented by Martins Kveps.

It is obvious that Mr. Baker is in a conflict of interest, as he represents the interests of different minority shareholders of LNT and Ventbunkers and abuses this situation to the detriment of the legitimate interests of LNT. He violates his fiduciary duties towards LNT and follows instructions of clients of other companies.

Is this amount of 29 million intact or has any part of it been misused?

R.M.: For the first time in December 2011, LNT received from Miselva some information regarding the account held in the name of Miselva with Valartis Bank. To the big surprise, LNT had to see that amounts of approximately 200'000 US Dollars have been embezzled form the account and transferred to the Latvian law firm Zelmenis & Liberte. By coincidence, the daughter of Mamerts Vaivads, Hardija Vaivade, was working for this law firm. LNT has never authorized such a transfer, and LNT has never (after 2007) used the services of the law firm of Janis Zelmenis. However, Global Oil Services (with the sole director Andrew Baker) had initiated in 2010 and 2011 various frivolous court cases against LNT, trying to attach LNT’s assets in various banks in Latvia. All these court cases failed, because there was no legal basis for them. So, there is a well founded suspicion that the LNT’s money was misused for some frivolous court cases against LNT. All this was done by Mr. Andrew Baker in collusion with Janis Zelmenis and probably Hardija Vaivade.

Furthermore, in the beginning of 2011, one million USD was transferred out of the Valartis Bank account for alleged "legal fees". For which legal fees this 1 Million US Dollars was transferred is unclear at this stage. A criminal investigation will show, whether this amount has been embezzled or not. Apart form that, also some smaller amounts have been unlawfully taken away in favor of Miselva and other service providers without that LNT had ever authorized such transfers.

To make a long story short: Never ever the undersigned requested the transfer of 29 Million USD to his “private account”. The payment request was made as part of my professional activities as an Attorneys of LNT to my law firm’s account for Clients' monies with Valartis Bank. There is a legal dispute with the company Miselva who played a doubtful role over years, and which refuses to transfer to LNT 29 million USD, which belong to LNT.

The criminal group around Kveps misused this story to initiate a defamation campaign against the undersigned at a moment, when they brutally falsified the Shareholders' Meeting of Ventbunkers. They wanted to divert the public interest away from their criminal activities in another direction by making some false allegations against me.

Best Regards,

Dr. Rudof Meroni

Chairman of the Supervisory Board

Latvijas Naftas Tranzīts