Joint-stock company Reverta has appealed in cassation instance to annul the judgement of the Supreme Court of 14 June 2016 by which the claim of Rems Kargins, the son of the former shareholder of Parex Bank Valerijs Kargins, was satisfied and a payment of more than 15 million euros was enforced upon Reverta. The latter has also asked for the intervention of the European Commission.
Having acquainted himself with the full judgement of the Supreme Court, the representative of Reverta, attorney at law Agris Bitāns says: “The judgement shows that the court not only has not examined most of the arguments submitted by Reverta but has not mentioned them either. For example, the court has not taken into account the significant amendments to the Law on Control of Aid for Commercial Activity or the Constitutional Court judgement which clearly states that 15 million euros claimed by R.Kargins is a subordinated liability and thus can be fulfilled only after a full repayment of the state aid.”
If the judgement remains in force as is, more than 15 million euros from funds recovered by Reverta will be paid to the family of the former shareholder of Parex banka instead of being deposited into the state budget. Seeing that such payment would appear to result in a misuse of state aid, Reverta has informed the European Commission of the judgement. It is expected that the EC will recognise the 15 million euro payment to be a blatant violation of the state aid which might result in serious sanctions against Latvia.
It should be reminded that since the restructuring of Parex Bank and until the moment the aforementioned amendments of law were passed Reverta has paid 18.6 million euros of interest on subordinated loans. These payments were mostly made to persons associated with the former Parex Bank and their family members.
Already the abbreviated judgement was a cause of astonishment to the attorney at law Agris Bitāns because the amendments to Law on Control of Aid for Commercial Activity that came into effect on 1 July 2014 forbade any payments to the holders of subordinated obligations before a full repayment of the state aid. In addition to this, A.Bitāns pointed out to another significant condition – two of the judges reviewing the case of R.Kargins were also among those adjudicating and fully dismissing an identical claim by Ņ.Kondratjeva.
For additional information: Reverta is a distressed assets manager, the main competencies of which are loan restructuring, debt recovery and real estate management. According to the approved Restructuring Plan completion of the workout of Reverta’s portfolio and closing of all operations has to be completed by the end of 2017. Since 1 August 2010 Reverta has recovered EUR 704.3 m from the restructuring and sales of distressed assets which is more than 63 % of all distressed assets in its portfolio. To learn more about Reverta, please visit our web page: www.reverta.lv. For more information contact: Marita Ozoliņa Head of Communication and Marketing Department Tel.: 67779142 or 29287169 E-mail: marita.ozolina@reverta.lv
