Identity of Citadele buyer to remain confidential until sale

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Economics Minister Vjačeslavs Dombrovskis told the press Thursday that authorities will be investigating a leak from the Cabinet of Ministers regarding the pending sale of state-owned shares in commercial bank Citadele.  In an interview with business portal he added that the identity of the buyer would not be released to the public until the sale is concluded.

In his comments Dombrovskis said “we are already getting asked informally by investors whether the Latvian state can be considered a loyal and predictable partner.” He explained that the leak did not happen until the matter had reached the Cabinet of Ministers agenda from the Economics Ministry. The final binding offers are to be submitted to the Privatization Agency by July 30.

However Saeima member Jānis Dombrava (National Alliance) indicated that various parliamentary committees would be vetting the sell-off, which he characterized as insufficiently transparent and posing the possibility of corruption risks. “I wouldn’t like for the worst traditions of privatization from the 1990’s to make a comeback”, he said, after a coalition parties’ cooperation council meeting Thursday.

Citadele was established in August 2010 as the successor to the restructured private commercial bank Parex, whose owners Valerijs Kargins and Viktors Krasovickis asked for a government bail-out in the fall of 2008 following liquidity difficulties caused by the global financial crisis.

The cost of bailing-out Parex forced the government to turn to the International Monetary Fund for a 7.5-billion-euro bailout of its own, heralding years of harsh austerity to repay the debt.

At the time the government ruled to take over its current 75% share of the bank, with the European Bank for Reconstruction and Development (EBRD) assuming control over the remaining 25%. The restructuring plan calls for the sale of Citadele to be completed by the end of 2014. 

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