Energy, Latvia, Legislation, Markets and Companies

Another detainee in the case, Daugavpils businessman Mihails Paladijs also had his shares in the company Buvenergoserviss arrested on July 6. Nevertheless, the man managed, after released from the police cell on June 17, to register another his company in another person's name, according to data from Firmas.lv.

Two real estate properties, which were bought by companies affiliated with Livanovics from Melko's daughter and from Mikelsons, have also been arrested, writes LETA.

It is possible that more assets and properties have been arrested, but the Corruption Prevention Bureau has not revealed this. The bureau's spokesman Andris Vitenburgs said that no information would be provided to the media at this time.

As reported, eight persons were detained altogether on June 15 – five officials at Latvenergo and the company's subsidiary Sadales tikls, and three private individuals. Courts later ordered Mikelsons, Melko and Livanovics remanded in custody, whereas other detainees in the case were released on their own recognizance.

On June 19, the Corruption Prevention Bureau arrested Livanovics' 100 percent shares in "Energy Consulting" company, Mikelsons' 75 percent interest in Unleash Performance and 20 percent stake in Brauksanas macibu centrs, as well as Mikelsons and Melko's shares (33.75 percent each) in the companies "Innovia" and "Cell Finance" (50 percent each).

The share capital of Energy Consulting is LVL 12,000, Unleash Performance – LVL 2,000, Brauksanas macibu centrs – LVL 10,000, Innovia – LVL 30,000, "Cell Finance" – LVL 42,000.

On July 6, Paladijs' 100 percent stake in Buvenergoserviss was arrested. This company was previously awarded various procurement contracts by Latvenergo; Livanovics worked on the company's board from 2006 to November 2009. The company's share capital is LVL 364,800.

Paladijs was detained on June 15 and spent two days in custody, but the Corruption Prevention Bureau then did not press for arrest as a security measure for Paladijs, and he was released on his own recognizance.

A few days later, several companies owned or co-owned by Paladijs changed hands.

As reported, Livanovics' company Energy Consulting was until now the Swiss company AF Colenco agent in Latvia, whereas AF Colenco is the consultant in the reconstruction of the Riga 2nd Cogeneration Plant. The Swiss company has its office in Latvia registered at the private home in Marupe that belongs to Livanovics, and it has been involved in the cogeneration plant reconstruction project ever since it started six years ago.

Energy Consulting"partner company in Estonia is the tax consulting and investment firm Kermon, whose subsidiary Isengar OU and the latter's subsidiary in Latvia, AGZ, in 2007 bought two properties from Melko's daughter and from Mikelsons, which have now been arrested.

AGZ, which is run by Livanovics, bought from Melko's daughter Kristiana a block of two-story buildings, in Bergi for LVL 230,000, which Melko had acquired two years before that for LVL 45,000.

On the other hand, Isengar in September 2007 bought part of a property near the sea in Engure Region's Abragciems village in for EUR 571,200 (LVL 401,440), which Mikelsons had bought in 2002 for LVL 21,140.

As already reported, the Corruption Prevention Bureau has said that in the case against executives at Latvenergo power utility, EUR 1.13 million were laundered. The Latvenergo executives arrested in the case – Mikelsons, Melko and Livanovics – had in conspiracy carried out legalization of dirty money, using firms registered in Latvia and abroad, the bureau said.

A representative from AF Colenco, in an interview with the business portal "Nozare.lv", denied any connection with the Latvenergo money laundering case. He said that his company had not been involved in any illegal operations or transactions.

The attorneys for all three persons arrested in Latvenergo case have informed that their clients consider the charges against them unfounded, and have pleaded not guilty.