Anti-graft cops carry out searches at major construction companies

The Latvian Corruption Prevention and Combating Bureau (KNAB) is on September 3 raiding the offices of several construction companies and state officials, according to LETA news agency. 

One of the construction companies raided is Rere Grupa, as the company's Guntis Aboltins-Abolins confirmed.

"Yes, I can confirm that KNAB officials at present are doing their work in the company's office building. They have not asked me questions, I don't know what this is related to," Aboltins-Abolins said.

Representatives of Skonto Buve, Latvijas Energoceltnieks, LNK Industries, Velve, Moduls Engineering and Binders told LETA that their offices were not visited by anti-graft officials.

The mobile phone of Merks board chairman Oskars Ozolins has been switched off. According to unofficial sources, Merks offices have also been raided. Also, mobile phone of Abora board chairman Juris Kravalis has been turned off.

Arcers building company responded to a phone call and said that anti-graft officials currently are in their office.

KNAB said that the anti-corruption bureau in cooperation with the Competition Council is conducting sanctioned raids. The raids are based on suspicion of involvement of at least ten largest construction comapnies in criminal action and breaches of the Competition Law.

On September 19, 2018 the anti-corruption bureau started a criminal procedure on large-scale graft, abuse of authorities. The Competition Council, meanwhile, is investigating an alleged breach of the Competition Law - illegal cartel agreement.

The facts collected by the anti-graft office suggest possible large scale bribery, possible agreement of procurement bidders on prices, bribery of state officials in order to ensure business interests in issues unrelated to procurements.

The crimes have been committed in a time period between early 2015 and mid-2018. The possible sums of bribes range from €25,000 to several hundreds of thousands of euros.

KNAB has a reason to believe that at least ten largest construction companies have been involved in the crimes.

KNAB sent information on alleged cartel agreement obtained during pre-trial investigation to the Competition Council, and the Competition Council launched investigation of the case in relation to breach of the Competition Law. In order to obtain evidence in the cases launched by both institutions, the Competition Council today is making unannounced inspections in ten construction companies in parallel to the processual operations conducted by KNAB.

According to the information at the disposal of the Competition Council, construction companies in a period of several years have coordinated their actions in relation of market distribution, participation in public and private tenders in Riga and Latvian regions. Cartel agreement is the biggest breach of the competition rights.

Further investigation will be conducted by KNAB and the Competition Council in line with each institution's competence.

The Competition Council noted that the inspections are the next step following launch of investigation, and the goal of these inspections is to obtain evidence. Inspections alone, however, do not prove the guilt of the companies and do not suggest of the outcome of the investigation.

KNAB chief Jekabs Straume said that the biggest corruption risks are in areas with public procurements because large financial resources are involved. Impact of large public procurements on the national economy is serious, therefore everything possible should be done to ensure that public and municipal tenders are correct and fair and that the best offer always wins.

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