Board member quits Sadales Tikls after green energy scandal

Rolands Lusvers has left the management board of Sadales Tikls distribution system operator after a scandal erupted over green energy licenses.

Latvenergo power utility, the parent company of Sadales Tikls, said in a statement to Nasdaq Riga stock exchange today that Sadales Tikls shareholders at a meeting today reviewed Lusvers’ resignation letter and decided to recall him from the company’s board.

Lusvers was in charge of the company’s development, including the management of the electricity connection process.

Latvenergo said that after reports about several energy companies that might have cheated to obtain licenses for green energy generation, the Latvenergo board ordered Sadales Tikls CEO Andis Pinkulis to clarify all the facts related to these allegations. Sadales Tikls has been cooperating with the Economics Ministry to check the combined heat and power plants mentioned in the report and has submitted an application to the State Police asking to probe the situation.

Lusveris believes that his resignation might help investigate the case faster.

The State Police has started a criminal process to look into activities of distribution company Sadales Tikls and power company Rigas Energija, which may have cheated to secure Rigas Energia's green energy license.

The criminal case deals with large-scale fraud. Nobody has the status of a suspect in the case at the moment.

According to the permit issued to Rigas Energija, the company had to begin its cogeneration business by October 5 this year. Distribution company Sadales Tikls has signed papers confirming that Rigas Energija is running a cogeneration plant to be connected to Sadales Tikls system for a test period of no less than 72 hours.

However, journalists from the TV3 commercial television established that no power was being produced by Rigas Energija in the location indicated. Following the television's report, the Economics Ministry turned to the State Police.

If Rigas Energija and other companies mentioned in the TV3 report launch operations and use their licenses to sell electric power for the increased price, which is charged on energy generated from renewable sources, consumers may be defrauded of up to €100 million in mandatory purchase component (MPC) payments over the next decade.

Rigas Energija has said that the allegations were untrue. According to Firmas.lv, Rigas Energija was registered in 1999. The company's share capital is €2,800.

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