The Management Board of JSC Olainfarm prevents fraudulent use of the company’s assets

on August 27, 2019
  • Large-scale possibly fraudulent activity suspected in the use of the company’s assets by former executives of JSC Olainfarm
  • Criminal proceedings have been initiated by the police
  • Suspicious transactions occurred between 2 January, 2017 and 4 April, 2019

In April of this year, following a request from the person directing the criminal proceedings, JSC Olainfarm recruited an independent, international auditor to investigate the economic activity of the former senior management and the payment for marketing services to a company in Cyprus. The conclusion received from the international auditor confirms that the transaction occurred, possibly causing losses to JSC Olainfarm. The existing Management Board of JSC Olainfarm has turned to the State Police with a request to declare the company a victim in the previously initiated criminal proceedings.

In April of 2019, when starting to act on their duties, the Board of JSC Olainfarm, became acquainted with the economic activities of the company and the previously signed contracts. The new Management Board identified transactions regarding marketing outsourcing services which raised doubts about their potential fictitious nature, economic validity and legitimacy. In addition, the amount of the contract did not match the amount of services received and the marketing activities were lacking supporting documentation, so initially cooperation with the company was temporarily terminated, at this moment, it has been completely suspended and the situation has been reported to the law enforcement agencies.

Following the instructions of law enforcement agencies, JSC Olainfarm actively cooperated with the international auditing company in order to help it gain an in-depth understanding of the marketing services purchased and to eliminate any shadow of a doubt. The auditor’s report, received in August 2019, indicates that an in-depth analysis confirmed – as a result of this transaction, potentially significant losses were caused to JSC “Olainfarm”.

The report of the international auditor has identified people involved in the transaction. Several officials and senior executives of JSC Olainfarm, who were related to the transactions have been previously suspended from performing their duties.

The practice used was incompatible with the principles of good governance and it has been terminated immediately. We are aware that these findings are unpleasant for everyone – the employees, investors and shareholders, however, we believe that as diligent and careful managers we must speak openly about the past events. We have nearly 1500 shareholders, and in the interest of all our shareholders, we aim to provide transparency in our economic activities as well as mitigate such risks in the future,” points out Lauris Macijevskis, the Chairman of the Board of JSC Olainfarm.

Additional information:
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Ph.: +371 29178878

The Management Board of JSC Olainfarm prevents fraudulent use of the company’s assets