On taking full control over the JSC “Parex banka” by the Government of Latvia
On 3 December 2008, the Cabinet of Ministers decided to make amendments to the takeover agreement of the joint stock company “Parex banka” (the Bank), specifying that the Bank’s majority shareholders hand over to the state all of their shares in the JSC “Parex banka”, or 84,83% of the Bank’s capital with no right to buy them out. The rest of 15,17% of interest will be still retained by “Parex Bank” minority shareholders . On 10 November 2008 the takeover agreement on the acquisition of a 51 percent controlling interest in “Parex banka” by the state-owned JSC “Latvijas Hipotēku un zemes banka” ( ” Mortgage and Land Bank “) was signed, having paid LVL 2 for them to “Parex Bank” former owners. Thus the JSC “Parex banka” became a subsidiary of the JSC ” Mortgage and Land Bank ” .
The agreement amendments prescribe the removing of Valērijs Kargins and Viktors Krasovickis, the shareholders of the JSC “Parex banka”, from the board of “Parex banka” Board, as well as re-election of council of the JSC “Parex banka” at an extraordinary shareholders’ meeting.
The above decision of the Cabinet of Ministers was made to prevent the excessive outflow of deposits and other funds from “Parex banka” that had started anew over the past week. In response to the changes in the Bank, early this week the Cabinet of Ministers and the Financial and Capital Market Commission jointly decided to set restrictions on the fulfilment of obligations by the JSC “Parex banka”.