On information in mass media
A few days ago, by referring to information provided by the State Police, mass media reported on investigation performed by the Authority of Combating Economic Crime of the State Police against AS “Rīgas kuģu būvētava” (Company).
The Company would like to explain the situation in this regard.
In particular, the criminal proceedings against the Company were initiated as early as on 21 January 2019 and are actually based on circumstances due to which a claim against the Company has been submitted to the court according to the civil procedure law on the basis of the claim by the Latvian Investment and Development Agency (LIDA) regarding recovery of the aid funding of the European Union fund granted to the Company and received by the Company within the framework of the agreement signed on 24 April 2013.
The above referred co–funding of the European Union Cohesion Fund was intended for implementation of the project of reconstruction of the heat supply pipeline and heat substations and it was used for this particular purpose, the project has been completed. However, during the project supervision a disagreement arose between the LIDA and the Company regarding compliance with the agreement conditions and it is currently being resolved within civil law proceedings in the first instance court, the next court hearing is scheduled to year 2021. At the same time, the Company would like to point out that it does not admit the claimed repayment of the co-funding and has submitted a range of evidence to the LIDA in this regard, it has also provided clarifications attesting the eligibility of the expenses presented in the project implementation. Irrespective of the above, the LIDA still decided to resign unilaterally from the agreement signed by the parties and to claim repayment of the full amount of the aid funding received by the Company.
In addition to the above, the LIDA also made a submission to law enforcement authorities against the Company regarding the above described circumstances which are being resolved according to the civil law procedure related to the parties’ dispute on the use of the funding, therefore, in the beginning of 2019 criminal proceedings were initiated at the Prosecutor’s Office of Investigation of Financial and Economic Crimes based on the features of crime provided by Part Three of Section 177 of the Criminal Law on alleged fraudulent actions by the responsible officials of the Company. The LIDA is declared as a victim in the above criminal proceedings and it has applied for compensation of damage in the amount equal to the amount of the civil law claim initiated against the Company.
At the same time, it should be pointed out that the legal protection proceedings of the Company has been declared, and within the scope of this proceedings the LIDA is recognised a creditor of the amount equal to the claim of repayment of co–funding, which is also applied for within the criminal proceedings. As the Company is currently implementing the plan of measures of the legal protection proceedings approved by the court, it is making monthly payments to its creditors as set by the plan, including to the LIDA, thus covering its claim against the Company according to both the civil and the criminal proceeding. Thus, the possible loss of the LIDA in the amount of the paid co–funding, if it will be declared as substantiated by the court within the civil proceedings, is being covered within the legal protection proceedings.
Still, within the framework of the criminal proceedings, on 20 October 2020, the Authority of Combating Economic Crime of the Main Criminal Police Board of the State Police adopted the decision on imposing arrest to the real estate owned by the Company in order to secure an eventual measure of enforcement to be applied against the Company.
The Company considers that the resolution on arrest of its properties contains several substantial deficiencies because it provides disproportional infringement of the property rights of the Company, as the value of arrested properties is not commensurate to the amount of the material claim to be resolved within the criminal proceedings. Neither has it been taken into account that within the criminal proceedings arrest is applied to the property which may eventually be seized in favour of the state at a later stage, however, according to the procedure of seizure, the creditors’ claims arising prior to the arrest should be satisfied from the proceeds obtained in the result of seizure of the property. As explained above, the Company is performing this particular obligation, i.e. satisfaction of creditors’ claims, including the claim of the LIDA, according to the plan of measures of the legal protection proceedings approved by the court.
Under the above described circumstances, the arrest imposed to the properties of the Company does not conform to its goal and its application has been hastily by the prosecutor in charge of the proceedings failing to carefully evaluate the particular situation, therefore the Company has submitted a complaint to the court regarding the resolution on imposing arrest and has asked to lift it. The court has not yet adopted a resolution regarding the complaint of the Company.
AS “Rīgas kuģu būvētava” would like to point out that it cooperates with law enforcement authorities and continues implementation of the plan of measures of the legal protection procedure approved by the court, and at present the adopted decision on imposing arrest does not affect the economic operations performed by the Company.
The Board of Directors of AS „Rīgas kuģu būvētava”