"Palink" owner turns to European Commission over Latvia's Insolvency Law

"REWE Group", a majority shareholder in the Lithuanian parent company of "Palink", the operator of the "Iki" and "Cento" chain stores, has filed an official complaint to the European Commission over Latvia's Insolvency Law and the insolvency proceedings launched against "Palink" by the Riga Kurzeme District Court.

"Palink" representative Velga Ozola told the "Nozare.lv" business portal that "REWE Group" claims in the complaint that an infringement procedure be started against Latvia.

"If the law, which violates European regulations, is not revised, and if the unlawful situation is not revoked, the Court of Justice of the European Union will order heavy financial sanctions," warned Ozola.

"REWE Group" believes that the Insolvency Law of Latvia is not in line with the European Union's regulations and the EU Charter of Fundamental Rights. Because of the faulty law, a financially sound company may see its properties auctioned in the coming days or weeks, "REWE Group" notes in the petition.

"The possible auction of "Palink" assets threatens not only the company's investments of EUR 123 million in Latvia, but also more than 1,200 jobs. A major drop in turnover at "Iki" and "Cento" stores can be observed already now," explained Ozola.

The company is determined to use all legal opportunities, and even turn to the EU Court of Justice.

"Palink" previously said that the insolvency procedure against the company had paralyzed the management of "Palink", which is why the planned investment of LVL 3 million in Latvia this year had to be put off.

"Palink" said it was losing at least LVL 300,000 each week due to the court's insolvency ruling.

As reported, "Palink" was ruled insolvent by the Riga Kurzeme District Court on January 5. Gundega Rozmisa was appointed "Palink" insolvency administrator.

January 13, acting Prosecutor General Arvids Kalnins handed in an official protest to the Supreme Court Senate's Civil Cases Department over the court's ruling on "Palink" insolvency.

The insolvency case against "Palink" was opened following a petition filed by private individual Sergejs Guscins, who claimed that "Palink" had not paid for work done by the construction company "Landekss".

"Palink" turnover in 2010 was LVL 73 million, which is 65.9 percent more than in 2009 when the company turned over LVL 44 million.

The company's losses reduced 62.1 percent, from LVL 8,130,874 in 2009 to LVL 3,080,870 in 2010.

LETA
Photo: buzzpodium.lv

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