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Business News Europe: twists and turns in airBaltic saga James Bond like

Alla Petrova, BC, Riga, 26.09.2011.Print version
The European business newspaper Business News Europe (BNE) has called the recent twists and turns of the saga involving Latvian national airline airBaltic James Bond like.

''The scriptwriters for the new Bond film need look no further for a plotline than the recent antics at Latvia's airBaltic. All the ingredients of a ripping yarn are there: more than 60 exotic locations across the globe, a mysterious Russian billionaire, a president held against his will and, most important of all, a first-class baddie in the form of a blond-haired, blue-eyed German mastermind controlling an international network from a secret location somewhere near Berlin,'' the newspaper writes with irony.


''That Teutonic terror is none other than Bertolt Flick (he even has a Bond baddy's name in addition to a 47% share of the company), a classic example of a good guy gone rogue. The former poster boy of Baltic business, who has been airBaltic's CEO since 1995, has been issuing a series of blistering attacks on the Latvian government (which controls a 52% stake… or does it?) which in turn has been demanding his head as part of an increasingly bitter battle for control of the airline,'' the newspaper writes.


BNE points out that Flick has refused to even visit Latvia since June over fears that he will be arrested as part of a corruption investigation as soon as he lands, leading to a bizarre situation in which he runs the Latvian state airline from another country and occasionally offers to fly local journalists to Berlin for press conferences.


''In one broadside, he claimed the government of Valdis Dombrovskis had turned the airline into a "hostage" to elections, creating "a crisis of confidence in customers and partners alike" and warned – presumably while stroking a white kitten – that unless a planned increase in airBaltic's share capital takes place pronto, the situation "may become fatal to the airline." He followed that up with another blast accusing the government of "meddling" and "hysteria'','' the newspaper points out.


BNE says that Flick also took the opportunity to refute revelations on an investigative TV show that there was anything dodgy about an attempt by a mystery investor to acquire nearly 60,000 shares (11.5% of the company) in airBaltic for EUR 9.6 million.


According to Flick, the attempted purchase was an attempt to tidy up a discrepancy between airBaltic's registered and paid-up share capital dating back as far as 2002, and that the Latvian Transport Ministry had actually asked for the situation to be sorted out before any fresh investment in the company could be made. Attracting an investor willing to pay over the odds for shares was a practical measure to maintain liquidity while the government dithers over making good on a promise to increase the airline's share capital by up to EUR 100 million, Flick claimed. "Thus arises the strange situation in which on the one hand the government of Valdis Dombrovskis undertakes to invest LVL 50m-70m, but the finance minister [Andris Vilks] claims that there is no money, and he obviously does not support the decision," Flick tells BNE.


But the appearance of the mystery investor looks suspiciously like a gambit by Flick's Bahamas-registered company Baltic Aviation System (BAS) to increase its holding by acquiring what a spokesman for PM Dombrovskis described as "non-existent" shares (legal battles continue over whether the shares actually exist or not).


''In fact, the identity of the investor isn't that much of a mystery. BAS is widely believed to be backed by Russian billionaire Vladimir Antonov via offshore companies Taurus Asset Management, ''West Investment'' and BAS's major creditor Latvijas Krajbanka – a subsidiary of Lithuania's Snoras bank, owned by Antonov,'' the newspaper goes on to say.


BNE points out that the sale of the "missing" shares wouldn't be the first time BAS had done deals of questionable propriety while forgetting to mention them to anyone else; for example, it sold itself exclusive rights to the airBaltic brand in December 2010 for a cool EUR 13 million then charged the airline a monthly fee to use its own name.


''The stakes were upped again on September 13 when Latvian President Andris Berzins was left stranded in Brussels after an EU meeting when his airBaltic flight was mysteriously cancelled. Pensioner Berzins eventually made it back to Riga in the early hours of the next day, but not before his planned flight from Hamburg also developed "technical problems" and Berzins' press officer had spoken of the president being Flick's "hostage". Far from apologising, Flick upped the ante by promising 700 more flight cancellations per month,'' the newspaper goes on to say.


"This decrease is directly related to the delayed decision on capital increase," he cackled, referring to government reluctance to hand over the EUR 100 million ransom.


''What seems certain is that the endgame at airBaltic is well underway – it just remains to be seen whether anyone can find a Latvian James Bond to deactivate the doomsday device before Flick disappears into space in his green-liveried escape pod.''


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