Former govt off the hook on Parex takeover

The abrogation of the investigation means that no criminal proceedings will be initiated for the mishandling of the Parex Bank takeover against former Prime Minister Ivars Godmanis or other officials in the previous Latvian government.

RIGA — Latvia’s prosecutor general announced Tuesday that the criminal investigation against the state officials for possible misconduct during the nationalization of Parex Bank will be dropped after nearly one year.

The prosecutor general’s office said that it did not find any indications that decisions on the nationalization of the bank were made for any of the participants’ self-interest or that the takeover was not in the national interest.

The criminal investigation was initiated in October 2009 after state auditors noticed irregularities in the takeover. However, about two-thirds of their report has been classified by the government, and given the prosecutor’s dismissal of the criminal investigation it’s unclear if more details about the takeover will ever be released.

“The Cabinet, they decided how to takeover Parex on criteria requirements. In all these meetings, they went in secret. All agreements are secretive,” Auditor General Inguna Sudraba told Baltic Reports in a past interview. “We’ve been working with these documents, but we can’t make them public. The Council of Ministers should go back and take out this secrecy and make these documents available for public use. We can only show it when the report is made public.”

President Valdis Zatlers also called for the report to be declassified last year, but to no avail.

Parex went belly-up in October 2008 on the heels of the global financial crisis. As depositors in Russia began pulling out funds en masse, the bank faced a liquidity crunch and had to turn to the government of then Prime Minister Ivars Godmanis for protection. To date the government has spent over €1 billion in propping up Parex by boosting liquidity and providing state guarantees, and was one of the primary reasons Latvia was forced to take an IMF-EU-World Bank bailout. The government currently owns an approximate 70 percent stake in the bank.

— Baltic Reports reporter James Dahl contributed to this article.

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