Latvian construction company's Lithuanian dealings under investigation

Take note – story published 3 years ago

The State Revenue Service (VID) has begun investigating Binders road construction company's transactions with a little-known Lithuanian company owned by a Latvian hotelier who went bankrupt 20 years ago, based on information gathered by the Financial Intelligence Unit (FID), according to Latvian Television's “De facto” broadcast on April 26.

Binders is one of the key players in Latvian road construction. The company has allegedly attracted the attention of VID's Tax and Customs Police Department Financial Crimes Unit over their payments to Lithuanian company Keltesa, according to unofficial sources. Investigators were interested in contracts, invoices and payment made in 2018.

“We confirm that VID has asked the company for information about transactions from 2018 with a Lithuanian company that performed Lithuanian road construction market research upon our request,” said Binders.

Binders appears to be puzzled by VID's interest in the transaction, but they won't say how much the research cost. They only reveal that over the past two years Binders has paid out about two million euros to subcontractors, accountants, lawyers and other consultants in Lithuania.

“I can only say that criminal proceedings have begun based on materials received from FID. The investigation began at the beginning of this year, but in the interests of the investigation I can't offer more detailed information,” said Tax and Customs Police Department Director Kaspars Podiņš.

According to unofficial sources, FID has allegedly been working with Lithuainan authorities. Keltesa is registered to a row house in the Klaipeda area where almost a hundred (many liquidated) companies are registered. Listed operations include sales of recycled raw materials, waste and scraps. Binders said they were specifically looking for a small company, because information can leak in larger companies.

“In our view the work has been completed in accordance with the conditions of the commission, as a result the company changed its initial strategy in the Lithuanian market. Last year we won the largest ever road construction procurement in Lithuania,” said Binders.

Keltesa's owner is Ruta Grundule and the CEO is Agris Latišs. In the early 90's Latišs was co-owner of several companies in the Skonto group. He began developing hotels in 2000, but that ended in bankruptcy.

The true beneficiaries of Binders behind several companies are Armands Garkāns, Normunds Luste and Alvis Tanbergs. Garkāns has the largest share, and he also owns construction company Arčers, which was called to the Corruption Prevention and Combating Bureau (KNAB) last year in relation to the construction cartel case. However the Competition Council director said that roads and bridges aren't a focus in the cartel case.

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