Millionaire debunks speculation claims over coin purchase

Take note – story published 7 years and 8 months ago

Construction magnate and millionaire Armands Garkāns has prompted an irate reaction by buying 1,000 of the 3,000 collector coins lauding the Latvian Entrepreneur recently released by the Bank of Latvia.

Collector coins are extremely scarce, so some accused Garkāns of speculation as these coins are often resold well above their original price tag set by the Bank of Latvia. 

A hard bargain

The 1,000 or so entrepreneurial coins available to the general public were sold out within a few hours at a price of €67 and appeared on classifieds websites with a heftier €300 price tag shortly thereafter. 

However in a revealing interview with's Sergei Pavlov published Wednesday, Garkāns claims he had no intention of earning money by buying the coins.

Garkāns says he was obliged to buy the coins by an agreement with the Bank of Latvia, which incidentally claimed it had no idea that any businessman would buy a third of the coins of this edition.

Garkāns is currently planning on distributing the coins for the sales price in cooperation with Latvia's Chamber of Commerce and Industry (LTRK).

— I have been a businessman for 25 years now. I own more than 20 companies that have paid €20m to the state in taxes, and that's just in one year.

Releasing the coin was my idea. I wanted for the concept of a "national entrepreneur" to become more respected in our country. Because for the last 25 years entrepreneurs have been called different names but never thanked.

In 2013 I met Bank of Latvia President Ilmārs Rimšēvičs and asked him, "What do you think about the idea?" Back then the Bank of Latvia was releasing coins with hedgehogs, cities, artists, composers, firefighters and so on. Haven't the nation's entrepreneurs earned a coin honoring them?

He said, yes, it's a great idea. However it's too late to release it in lats (Latvia joined the Euro zone in 2014) but we can talk about euros. This was three years ago.

In 2014 I returned to the matter and Mr Rimšēvičs said that I have to submit an application via the entrepreneurs' organization. I went to the LTRK even though I wasn't a member. I asked whether they'll take part. They too were excited. They had celebrated their 80th birthday a year ago and were sorry they hadn't thought of the idea earlier.

Later on Rimšēvičs said that even though we both thought the idea was good, there was no guarantee that all of the coins would be bought. 

[Rimšēvičs said] the Bank of Latvia could not support an idea that could bring it losses. That's why I'd have to guarantee that I'll buy half of the release.

That's your answer as to why I bought the coins.

— Did you have to buy a half or a third of them, as you bought a third in the end?

— I promised to buy half of them. 

— Was it an oral agreement with Rimšēvičs?

— Yes. I told him I agree. Look, I'll even show you the letter of guarantee. (Shows the document.) The second condition was that I'll organize the artists' contest on my own and that the Bank of Latvia will not be spending money on it. I was given a list of artists with whom the bank is working, and we attracted a few.

Here are the results of the contest. (Produces another document.) I was on the contest committee together with the board of LTRK, [representatives of] the Coin Department at the Bank of Latvia, and the main artist [Laimonis] Šēnbergs.

I spent my own money on it, as artists must be paid — that was a condition by the Bank of Latvia too.

— How much did you spend?

— About 5 to 7 thousand euros.

I was sure I was doing the right thing, that there'll be a coin honoring all entrepreneurs. At that moment I felt a sense of having a mission. He (Rimšēvičs) mentioned the Rīga Technical University as an example — its anniversary was honored by a coin too.

By the way, I am collecting them myself. I have two full collections of coins released by the Bank of Latvia. I want to give them to my grandchildren when they turn 18. Sadly I had to buy the Rīga Technical University coin on (a classifieds website) to obtain the full set.

— Did you buy it for the "speculation price", for 160 lats?

— I can't recall exactly but I bought it for about three times over what it cost at the Bank of Latvia. Well, what else was there to do if I needed it...

As concerns the "National Entrepreneur" coin, at first I thought where I would put them once I bought them. I thought that I can either sell it gradually for the price of Bank of Latvia, for its direct costs, or cooperate with entrepreneurs' organizations that would buy the coins from me at the price set by the Bank of Latvia, for their members or to give away as presents. And some of them I was planning to give to my partners and employees as gifts.... 

Those were the conditions. I agreed to them and was grateful but said that I did not want the release to be of 10,000 or 5,000 coins. I rather preferred the minimum lot.

They said that the minimum [release] is 3,000 coins. I said okay, that I guarantee I'll buy half of it, but you guarantee that it won't be a large lot or otherwise I won't be able to sell them.

Later on real work started. In 2014 I wrote an official letter to LTRK — here it is. From there they wrote a letter to the Bank of Latvia over supporting the idea. Then I wrote a guarantee letter, that I take it on myself — whatever it takes — to buy 1,500 of the coins upon release... (Shows the three letters.) The release was planned for 2016.

— So you paid for 1,500 coins? 

— For 1,000. Because the entrepreneurs' organization showed interest, as I thought it would.

I was told at LTRK - Armands, we'll take 500 of the coins for representative purposes, for gifts. And we'll pay for them.

I was glad that I have to buy only a thousand. And I hope very much that another organization shows up that will offer to buy them from me — and I'll sell them for the price set by the bank.

— Who decided that LTRK will buy 500 of the coins?

— Mr [Jānis] Endziņš (board chairman at the LTRK) asked me — can we leave a part for ourselves? I said gladly, just tell me how much you need and we'll give all of it to you...

Three years ago I came up with a good idea and decided to fulfill it. And it's not the only case where I'm trying to do it so that the idea of a "national entrepreneur" would not be a disgrace but a source of pride. Like the Americans, the English and other nations taking pride in their entrepreneurs.

— But the latest reaction...

— The reaction and your news story was a shock to me! (Smiles.)

— Was there something written there that's not correct?

— Well, I was called a speculator, that I had bought off the coins...

— You weren't called a speculator in the article.

— I read it in the comments. If the context leads people to a thought, then there's something unseemly in there somewhere... I didn't say it in vain that

my companies have paid €20m a year in taxes. I have no need whatsoever to earn by means of speculation. It's a matter of honor for me.

And if such a reaction follows, the desire to do something else in the future disappears. 

— Something more was written in the comments - that if the coins are honoring the national businessmen, it would be good to offer them to a wide range of businessmen but not a particular one of them. 

— Of course! If the Bank of Latvia hadn't made a rule that I have to guarantee buying half of the party, then of course! And I would have just asked my secretary to buy me a few coins at the Bank as I usually do.

— Have any businessmen called you in the last few days?

— Yes, they have.

— Do they want their own coin?

— And they'll get their own. And for the price set by the bank... It's strange that three years ago I couldn't picture it becoming a bestseller. If I had known it then, I would have agreed on releasing 10,000. But Rimšēvičs would have said that I have to commit to buying 5,000.

— I have doubts about that... you're a numismatist yourself...

— No I'm not. I only have coins released by the Bank of Latvia.

— You bought the Rīga Technical University coin. It was the same case there — a release of 3,000 coins, and half of it went to the university. If so few coins are being sold — only 1,500 — it becomes much more expensive very quickly. That's why in the case of the "National Entrepreneur" you could have no doubt whether the coin would have been in demand.

— I would agree if the following were true - that my actions were directed towards earning money. In that case I would have thought exactly what you said and in the end carried out a plan like that.

However I had only one thing on my mind - to be able to sell these coins afterwards and return my investment. That's it. So that it wouldn't turn out that I, the author of the idea, would lose a lot of money on the purchase - 60 thousand euros - and in the end have only a sense of satisfaction to show for it.

And if you hear from anyone at all that Armands Garkāns has sold even a single coin for a higher price than the Bank of Latvia in its registers, then come to me and tell me: you're a piglet, Garkāns, and a speculator at that! Tell me anything you want, really.

— How do you plan on selling the coins to other entrepreneurs? Will you be offering them to people you know?

— I don't know yet. With all the fuss... I have to be very careful not to offend some entrepreneur or tell someone that they're unworthy... What I want the most is that not one of these coins is sold on

— Isn't it more logical to leave part of them for gifts, and to concede another part to the LTRK so it distributes them further? The Chamber represents businessmen after all.

— Just think about it - we worked with the chamber, ran a contest, it was all good. And now journalists are calling them and asking what will they be doing with their coins. They're perplexed!

And now I'd walk in and offer them to take up obligations that take time and administrative resources... Well, I'll offer them this of course.

— How much?

— A large part, about 700 to 800 coins. I haven't thought of it but I'll check it out.

I'll repeat myself: I wanted to do a good thing but now I'm a hostage of the situation. There are about 100,000 entrepreneurs in Latvia but I have only 1,000 coins. And now what? Am I to judge who's worthy of them?

— Will you contact LTRK? 

— I will for sure. Perhaps we'll find a solution as to how to organize it all - with the condition that if they sell the coin to business people they do it at a price not above the one at the Bank of Latvia registers.

After the interview Armands Garkāns told that he had called LTRK's Jānis Endziņš who agreed to the idea. The final decision over the matter is expected to be taken at the next meeting of the chamber's council. He thanked for the idea to involve LTRK in distributing the coins.

Meanwhile the Bank of Latvia has announced that due to great interest it'll sell part - less than 100 coins - of its reserve stock of the coin in question.

Those willing to buy this exquisite coin can place a reservation starting 10 a.m. on September 22 on the Bank of Latvia website If you place a reservation you have to purchase it by Tuesday.

The controversy was just part of an awkward week for the central bank governor just days before the bank's annual conference. Earlier this week Saeima deputy Karlis Serzants demanded a probe into Rimšēvičs' financial declaration which appeared to show an expensive apartment being rented out to two different people and other inconsistencies.

However, a bank spokesman said the governor's financial affairs are in order and all payments could be accounted for.

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