Economics Minister sacks entire Latvenergo Supervisory Board

In an unheralded move June 19, energy giant Latvenergo had its entire Supervisory Board dismissed at the behest of Economics Minister Ralfs Nemiro (KPV LV party), LSM's Latvian language service reported.

Latvenergo is the state-owned electricity utility whose shareholder is the Latvian state, under the auspices of the Ministry of Economics (EM).

Nemiro thanked the Latvenergo Supervisory Board for their efforts, but said he would have liked them to be more active and "dynamic", as well as to address the issue of reducing electricity tariffs. He also said more effort should be made to expand into other markets such as Estonia, Lithuania and Poland.

"The decision has been taken to dismiss the supervisory board... A change of direction is necessary... it's important the new board members are more active," Nemiro told Latvian Radio.

Nevertheless the sacked supervisory board members - elected in 2016 for a five-year term - remain listed on the Latvenergo corporate website at the time of writing.

The Supervisory Board consists of five independent members: Andris Ozoliņš, Chairman of the Supervisory Board; Andris Liepiņš, Deputy Chairman of the Supervisory Board; Baiba Anda Rubesa, Mārtiņš Bičevskis, and Martin Sedlacky.

The Supervisory Board is separate from the Management Board which is responsible for day-to-day operation of the company, which remained untouched in the boardroom cull.

According to company documents, the Supervisory Board is "the supervising body of the Company representing the interests of the Shareholder between Shareholders' Meetings and constantly supervising the operation of the Management Board of the Company within the framework defined by legislation."

In addition it is responsible for the medium-term operational strategy of the company, the Latvenergo Group's corporate governance policy, risk management policy, code of ethics, remuneration policy, and internal audit policy.

The Minister added that he had appointed an interim supervisory board and that a competition will be announced for the sudden vacancies at an unspecified future date.

One of those dismissed, Baiba Rubesa, took to social media to criticize the move and the willingness of PM Krišjānis Kariņš to sanction such a move. 

"It looks like [Kariņš and the cabinet] are not interested in providing good, sustainable corporate governance for public enterprises in all ministries. Sad," she wrote, adding that the move might also damage Latvia's international reputation.

 

In 2018, Latvenergo Group was the most valuable energy company in the Baltics, with the value of its assets amounting to EUR 3.8 billion at the end of the year. Revenue amounted to EUR 878.0 million and the profit for 2018 amounted to EUR 76.0 million.

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