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The representative office of the Kaliningrad region in Vilnius was sold for debts
The buildings of the representative office of the Kaliningrad region in Vilnius were sold for debts on a loan from Dresdner Bank . At the beginning of the week, the Interfax agency reported this, citing bailiff Gintaras Matkevicius. “The representative office was sold to a buyer recommended by the lender,” the agency quotes the words of a Lithuanian official, who refused to name the buyer or the amount paid for the representative office in Russia’s westernmost region. Rumors immediately spread throughout the Kaliningrad region that the mysterious buyer was... the regional authorities themselves. In fact, this turned out to be not entirely true, but the deal is also beneficial for the Kaliningrad authorities.Let us remind you why the property of the Kaliningrad region went under the hammer. In 1998, the administration of Kaliningrad Governor Leonid Gorbenko took out a loan of $10 million from Dresdner Bank . for a period of five years. These funds were spent on modernizing the Baltptitseprom poultry farm. The poultry farm was then bankrupt several times and renamed. In short, they messed with the credit money - ex-governor Gorbenko was even tried, but then acquitted. And deputies of the local Duma, having conducted their own parliamentary investigation, recognized the use of the loan as a “talented scam.”
After the loan expired in February 2003, the administration of the Kaliningrad region refused to return the money. Then the German bank transferred the collection of the loan debt to the Cypriot company Duke Investment Limited, which applied to international arbitration in London. The arbitration court decided to collect debt from the Kaliningrad region in the amount of $20.2 million, including $9.6 million in interest. According to the decision of this court, each day of delay in debt repayment costs the debtor 19.75% per annum. Over the course of a year, the total amount of debt may increase by approximately $4 million. In seeking repayment of the debt, creditors (in Russia the London decision was not recognized) initiated a procedure for seizing real estate abroad - the buildings of the representative office of the Kaliningrad region in Lithuania with subsequent sale.
The regional authorities bought two small buildings on Rudians Street in Vilnius back in 1995 for about 250 thousand dollars. And they are still not going to give them up so easily. Information about the sale of a representative office in the Kaliningrad region caused a lot of noise. At first it was perceived as a disgrace - they say, they have lived, regional property is already being sold for debts, how can one attract investments with such an image. Then versions appeared in the local press that the representation did not go “to the left” after all, the honor of the uniform was more or less saved, and, they say, the team of Governor Georgy Boos had a hand in this.
As it turned out later, Deputy Prime Minister of the Kaliningrad Region Yuri Shalimov participated in the purchase and sale procedure of the representative office, who told local media that the buildings were sold at the minimum price. “A Lithuanian company, we know it, bought them at the minimum price. After this purchase, nothing changes for us,” said Mr. Shalimov, emphasizing that the representative office operates as before and no one will evict it. The representative office of the Kaliningrad region of Vremya Novostey confirmed this information, emphasizing that “we are very happy with this turn of events and now with renewed vigor we can begin organizing the days of the westernmost Russian region in Lithuania, which are scheduled for the coming spring.”
If the Kaliningrad government really managed to buy out the buildings using a friendly company, then on the territory of Lithuania the issue of attempts to seize regional property for debts is in theory closed. The fact of the sale took place, and it apparently satisfied all parties.
The only negative point left is the decision of the London Arbitration Court, which allows creditors to continue trying to “squeeze” Kaliningrad property in another territory. But here the local authorities decided to “treat” like with like. As Mr. Shalimov stated, there are violations in the London Arbitration decision. And a lawsuit has already been filed with the Paris International Arbitration Court at the Industrial Chamber, in which the regional government asks to declare the decision of the London Arbitration invalid. If this continues, the Kaliningrad region will eventually be able to remove the stigma of a “black economic hole” from the region.