Baltic States – CIS, Energy, Latvia, Legislation, Railways, Transport

Litasco refuses to disclose the secret bank account to which, they claim, 20 million euros were transferred. In the first 6 months of 2010 the Lukoil subsidiary Litasco systematically ignored formal banking instructions given by the VBU management continuing to make payments, close to 20 million euros, to a secret bank account unknown to the VBU management. „I have never experienced this in my life, when a customer doing business with a company refuses to say where they are making payments for the services they received. This is against good faith“, says Dr. Rudolf Meroni, Chairman of the Ventbunkers Supervisory Board.

The modern criminal story is more complicated than that: In summer 2009 a conflict arose inside VBU, when the Supervisory Board under the lead of Meroni discovered that a shareholders’ group around Olafs Berkis had established some hidden schemes of offshore companies to defraud VBU from its legitimate service income and Latvia from tax revenues. Without doing anything, these companies collected up to half of the VBU service income.

Towards the end of 2009 Meroni intensified the investigation. It appeared that one of these criminal schemes involved the Lukoil subsidiary Litasco. Litasco refused any help to uncover the fraudulent schemes. For this reason, the legitimate VBU Management did not wish to extend the agreement for fuel oil transshipment with Litasco for 2010. Litasco was fully aware of that after several meetings.

On December 18, 2009, the same VBU shareholders’ group around Olafs Berkis led by the lawyer Martins Kveps falsified the shareholders’ list for a VBU shareholders meeting called for this day. Security guards with weapons refused to allow 70% of the legitimate VBU shareholders to participate at the meeting. Under the lead of Kveps false Minutes were prepared alleging that the Supervisory Board and Management of VBU had been changed. Olafs Berkis became the false Chairman of the Supervisory Board, Dzintars Kass the false Chairman of the Management Board. Under strange circumstances these falsified decisions were registered on December 23, 2009 with the Register of Enterprises. The Register was warned of the falsifications by the majority shareholders.

On December 30, 2009 the false (Berkis) management signed a transshipment agreement for fuel oil with Litasco for the year 2010.

On January 21, 2010 an official VBU shareholders’ meeting, attended by more than 70% of the real shareholders, took place and reestablished the legitimate situation. It was registered in the Register of Enterprises on January 26, 2010. After this, the false VBUs management under Berkis illegally occupied the VBU office building in Sanatorijas iela in Ventspils with the help of the security company TM Security. It took several month to remove them with the help of the Police. TM Security lost its license because of their violations of the law.

In early 2010, the false (Berkis) management allegedly signed a secret agreement with Litasco that future payments for services rendered by VBU would not be paid to the VBU bank accounts, but to some hidden account unknown to the legitimate management.

In mid 2010 the VBU management refused to receive any more shipments from Litasco unless advance payments were made to the official bank account of VBU. In August the first payment was received by VBU and shipments continued. However, Litasco still did not disclose the bank and account to which the payments of more than of 20 million Euros were allegedly made.  

VBU Management Board says: We did everything to accommodate Litasco. Throughout the entire year everything was handled professionally with no hang-ups or complaints. This could have been a very good cooperation for both companies. The problem is that Litasco did not want to act honestly towards us. 

In December 2010, VBU offered Litasco to extend their service agreement for 2011 for the same price as in 2010, but only if Litasco disclosed the hidden payments. Litasco refused this and requested to reduce the VBU tariff by 30%. In this situation, VBU made a public tender with interested energy traders. VBU signed an agreement with one of the main competitors of Litasco who offered the highest price for the VBU services. Mercuria, the winner of the tender offered the double of the price Litasco had offered. To reverse this situation Litasco is now illegally blocking the VBU terminal with the only purpose not to allow its competitor Mercuria to start working.

The VBU management has decided to bring the Litasco cargo offshore in order to allow normal operation of its terminal. The decision is now with the Latvian Customs Authorities to allow the loading of the cargo. VBU has clearly this right under its contract with Litasco. VBU hopes the Customs Authority to make the proper decision based on the law.

It is loudly rumored, throughout Latvia, that Olaf Berkis, is trying very hard to misuse his influence in the political party New Era (Jaunais Laiks) to convince politicians of the highest level to favor his partner Litasco to instruct the Customs Authority not to allow the loading. It will be interesting to see how the decision of the custom authorities will be. If the customs authorities refuse the loading of the Litasco cargo blocking the VBU terminal, they may become liable for the damage intentionally caused by Litasco.