Double dose of boardroom trouble

Business practices in Latvia have come under the spotlight with mis-allocation of funds suspected at two of the country's largest companies.

Riga airport board members Andris Liepins and Ilmars Upenieks have been suspended from their positions, the airport's supervisory board chairman Juris Kanels confirmed June 17.

"The supervisory board decided to suspend to members fo the management board. Liepins and Upenieks," he said.

The decision has to be approved by the shareholders meeting, Kanels said.

Latvian public television reported a day earlier that an internal audit had been conducted at the airport, revealing mismangement of funds.

The audit report points to several violations, for instance, a €700,000 contract the airport concluded this spring with Velve construction firm whose former board member Ilmars Upenieks is now a member of the airport’s management board.

The audit also implicates the airport’s other board member Andris Lapins in causing a conflict of interest, as the airport’s board awarded a €7,000 contract to the Latvian Aviation Association, commissioning a study on the Latvian aviation sector’s impact on the economy. Liepins is the chairman of the association.

The Transport Ministry said it had received the report and forwarded it to the airport’s supervisory board, which is expected to provide its conclusions by the end of June.

Meanwhile in Lithuania the chairman of Latvia's largest road and bridge construction company Latvijas Tilti, Genadijs Kamkalovs, is suspected of having paid a bribe to the head of the Lithuanian Klaipeda port's director for infrastructure, Gediminas Zumaras, for decisions that would bring financial benefit to the company.

"G.K., as a representative of the Latvian company that has won a few construction contracting tenders at the directorate of the Klaipeda state seaport estimated at more than €10 million, has paid a bribe of more than €9,500 to G.Z. several times," the Lithuanian Special Investigation Service said.

The SIS investigation was conducted in cooperation with the Latvian anti-corruption agency KNAB. Kamkalovs and Zumaras were detained on June 16 in connection with the probe, SIS agents also searched the Klaipeda port's directorate.

A simultaneous operation and other procedural actions took place in Latvia. KNAB detained six individuals holding high posts in one of Latvia's biggest concerns and conducted about 20 searches, seizing documents that are significant for the probe and more than €100,000 in cash, Lithuania's SIS said.

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