Legal Action Initiated: Seizure of a Latvian Bank Corporation Pursued by Prosecutors
In a significant development, the Prosecutor General’s Office of Russia has filed a lawsuit against Rietumu Banka, the Bank of Latvia, its Moscow representative office, and affiliated companies KI INVEST LLC and RB Investments SIA at the Moscow Arbitration Court. The case alleges that Rietumu Banka and its subsidiaries engaged in illegal capital flight and asset control activities that violate Russian economic restrictions and sanctions.
Key details of the lawsuit include:
- Alleged Capital Flight: Between 2022 and 2024, over 105 million rubles were withdrawn to Rietumu Banka under the pretense of loan repayments. The original loan agreement from 2016 was reportedly used as a mechanism to avoid debt reduction while transferring capital abroad.
- Asset Control and Illegal Seizure: Russian prosecutors claim that Rietumu Banka maintained control over KI INVEST LLC, which owns significant property in Moscow (more than 1.24 hectares of land and 14,000 sq.m of real estate). These assets are said to have been involved in schemes to transfer income abroad illegally and undermine Russia’s economic sovereignty.
- Ongoing Debt: The alleged outstanding debt tied to these activities is over 2.15 billion rubles, considered by prosecutors as part of a deliberate effort to circumvent Russian sanctions.
The involvement of RB Investments SIA and KI INVEST LLC as subsidiaries or affiliated companies to Rietumu Banka ties them directly to the allegations and ongoing sanctions or legal scrutiny by Russian authorities controlling the case. This lawsuit reflects heightened legal pressure on Latvian financial entities accused of facilitating capital flight from Russia amid increasing geopolitical tensions.
The General Prosecutor's Office assessed the actions of the Latvian side as expropriation. In response, a bill "On Actions with Immovable Property Necessary for Preventing Threats to National Security" was rushed through the Latvian parliament, initiated by the Saeima's National Security Commission.
Rietumu Banka is alleged to control Russian "KI Invest" through its subsidiary RB Investments. KI Invest owns land plots totaling over 1.24 hectares, commercial buildings and premises totaling over 13,800 sq.m, located in Moscow and the Moscow region. To maintain control over the assets, 100% of the shares in KI Invest were pledged to the bank.
The Latvian bank is accused of joining the sanctions and hostile policy of the Latvian authorities against Russia since February 2022. As a precautionary measure, the General Prosecutor’s Office proposed to arrest all shares in KI Invest, all real estate, and the representative office of the Latvian bank in the center of Moscow.
The Russian Foreign Ministry described the actions of the Latvian authorities as "state-scale piracy". RIA Novosti sent a request to LLC "KI Invest" and Rietumu Banka for comment, but at the time of writing, no response has been received.
This case marks a significant escalation in the ongoing tensions between Russia and Latvia, with both sides accusing each other of economic aggression and violations of sovereignty. The outcome of this lawsuit could have far-reaching implications for the financial and diplomatic relations between the two countries.
- The lawsuit filed against Rietumu Banka and its subsidiaries involves allegations of illegally transferring over 105 million rubles, a move that some may perceive as a form of illegal capital flight affecting the business sector and finance.
- The case also includes claims of asset control activities by Rietumu Banka, as it is accused of maintaining control over KI INVEST LLC's significant properties in Moscow, a matter that may raise questions in the industry and politics about the sovereignty and economic health of both Russia and Latvia.
- The ongoing tensions between Russia and Latvia, with accusations of economic aggression and violations of sovereignty, have raised concerns in the general-news sector, as the outcome of this lawsuit could have far-reaching implications for the diplomatic and financial relations between the two countries.
