Parex Bank was nationalized by Latvia in November 2008, which was part of the reason the government was soon thereafter forced to accept IMF funds.

RIGA — Latvia’s Financial and Market Commission announced that it will request the Prosecutor’s Office to start an investigation Parex Bank’s former shareholder Viktors Krasovickis and president Valerijs Kargins.

Krasovickis and Kargins were the previous owners of Parex Bank before it was nationalized by Latvia, the ultimate cost of which could be over 160 million lats (€226 million) for the state. Both are among the richest people in Latvia. They were with the bank from its start in 1992 after Latvia’s independence from the Soviet Union, and after Kargins became bank president in 1998 it grew to be the second-largest bank in the country, with much of its deposits coming from Russian businesspeople.

The Financial and Market Commission told the Nozare.lv business news wire that the investigation centered upon whether Krasovickis and Kargins received capital for the bank from dirty money, something long speculated upon in the Latvian press. The commission would not comment further on the case.

Krasovickis and Kargins have told the press in past interviews that they put 36 million lats (€50 million) of their own money into the bank.

Latvian central bank president Ilmārs Rimšēvičs said his institution was unaware of any malfeasance on the part of Krasovickis and Kargins.

This article is free to view. To read Baltic Reports’ subscription-only articles, click here.