Prague, Sept 29 (CTK) – The Industry and Trade Ministry has introduced a new method assessing companies’ requests for recommendation for deals abroad due to a recent affair of the Czech company Liglass Trading CZ associated with a 12-billion-crown hydro power plants deal in Kyrgyzstan, the daily Hospodarske noviny (HN) wrote on Friday.
David Hlustik of the ministry’s press department told the daily that shortly after the start of the Liglass affair in July, Industry and Trade Minister Jiri Havlicek spoke with his Deputy Vladimir Bartl, who had acted as a warrantor for Liglass, and agreed with him on an adjustment of the method of companies’ assessment for this form of support, the daily writes.
“I am convinced that the adjustment of the methodology can decrease the risk, although we will never be able to guarantee the companies’ financial standing in the future,” Havlicek told the daily, also saying that no further measures were planned by the ministry in this respect.
Shortly after the deal was agreed on between Liglass representatives and Kyrgyz President Almazbek Atambayev, HN found out that the company was situated in a run-down facility and had false partner references on its website, the daily says.
Liglass, moreover, was not known in the field. The company was aided to the contract by a recommendation of the Presidential Office, signed by its head Vratislav Mynar, and the ministry’s referral, HN writes.
“We place more emphasis on reviewing the references stated by companies,” Hlustik said about the changes.
From now on, the ministry will be making enquiries with the partner companies and verifying the references included on companies’ websites to issue state recommendations.
This was not the case with Liglass, however, “the question remains whether it would have succeeded in the review of its stated references. We cannot rule out that it could have provided supplementary information to the authority, which it was not going to disclose to the media,” Hlustik told HN.
A week ago, Bartl defended the recommendation provided on account of Liglass by saying that the ministry does not have an investigative department and thus it cannot find out all information about companies. Bartl then told the daily they had compared the data that was available including financial solvency data, the daily writes.
The Kyrgyz government eventually withdrew from the contract with Liglass, as the company reportedly did not observe the terms of the agreement. Within one month of contract signing, it was to purchase stock amounting to $37 million in the ZAO Verkhne-Narynskiye GES company that was in charge of the project – a value of the works that the RusGidro company carried out on the cascade so far.
Liglass objects, saying it will launch an arbitration with Kyrgyzstan over the deal, requesting also that a guarantee payment of one million crowns be returned, HN writes.
