Finance Minister asks for probe into local mayor's €200m loan

Latvian Finance Minister Janis Reirs has asked the Corruption Prevention and Combating Bureau (KNAB) and the Prosecutor General's Office to start an investigation over the €200m promissory note issued to an offshore company by Janis Abolins, the former mayor of the Lielvarde town in central Latvia, reported BNS Thursday.

The Finance Ministry said that the mayor had violated a number of laws by single-handedly signing an agreement about a loan worth 200 million euro from the offshore company, Riverside HK Ltd.

“Such actions on part of a municipal official are unacceptable. All local governments are aware of the prescribed procedure for taking loans to finance their projects,” the finance minister said.

The Finance Ministry suspects fraud and has asked the competent authorities to investigate this transaction.

Abolins stood down as the mayor of Lielvarde on Tuesday after it surfaced that he had signed a document about taking a 200 million euros loan - more than 15 times the municipality budget - from an offshore company, the Liechtenstein-registered Riverside HK Ltd.

Abolins had asked the Latvian Treasury to approve the loan to the Lielvarde local government and issue a guarantee to the lender which means that, if the municipality failed to repay the loan, it would have to be paid by the state.

The local authority distanced itself from Abolins' dealings with the company and decided to ask the law enforcement authorities to assess the situation.

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