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Belokon code

Valeri Belokon. Photo: Maris Morkans.

Today the Europe considers Latvia a success story. Yet the dry figures of various reports are less convincing. The real success history in a country is written by individuals, who create workplaces, contribute to the state budget, and have new projects. Valeri Belokon is one of such people. He is the co-owner and constitutor of the Baltic International Bank, co-owner of English football club Blackpool as well as a string of companies both in Latvia and other countries. Valery Belokon is the trustee of His Royal Highness Prince Charles’s Foundation.

Meetings that shape one’s life

Valeri Belokon (L) attends the event hosted by HRH The Prince of Wales.
You are the only one person in Latvia entrusted by His Royal Highness Prince Charles with the honor to become a trustee of the Prince’s Foundation. Is it due to the fact that you have a business in the United Kingdom?
Why should the only one person in Latvia with business in the United Kingdome become one of just 9 trustees of His Royal Highness, while the British Commonwealth counts more than one billion people? It is an entirely different matter... You are presented a chance in your life, and afterwards - if you are deserving of it, you get it. If not, wait for another chance. How does it happen? There are thousands of small gears... After my first meeting with him I did not anticipate the second, the third...

Your meeting with the Vice-president of the publishing house Forbes Christopher Forbes you recently visited, also happened by chance?
The biggest chance. Mr. Forbes was going to fly to Riga together with his wife and friends. And our common acquaintances (and Mr. Forbes also knows His Royal Highness) informed me about that. I said: if so, I would gladly invite everybody to a dinner. They agreed. You see, it is very pleasant experience to chat with people about life, about history without any business goals. Later on I received an invitation to visit his chateau in France. Mr. Forbes had organized a gathering for some 20 persons without discussing sales and acquisitions. We travelled around, chatted about France, about the palace, visited the museum... Christopher Forbes himself takes a great interest in ballooning, and it was the first time for me to fly a balloon.
Valeri Belokon and Christopher Forbes.
Does the business avail of such meetings?
The life itself! This means, in everything. When you spend three days with somebody to share their expertise, to share your own, and it turns out to be interesting... I invited everybody to Riga, and if they manage to find an opportunity we will doubtlessly continue our meetings. What will come out of it? Will there be a joint business? I don’t even want to guess. You know, we use this word, business. Let us try to call it differently. Life!

Highway Code on a foreign market

It is obvious that Latvian market is limited, and therefore our industrialists seek for opportunities to expand outside it. You have collected considerable experience in working
abroad. Do you have your own rules for penetration of foreign markets?

Anybody, before going to a foreign country should have at least general knowledge about its traditions, the way of life. It applies to tourism, to private life, and even more so to business. It should be taught at school, as any inhabitant of Latvia regardless of their occupancy will be compelled to cross the domestic border. I mean, while abroad we first of all need the assistance from our country. It should benefit from the companies’ orders from other countries, when all the proceeds are brought home. And therefore the rule number one: see how your country may protect you if you are working on foreign market. One should know what relations are between your home country and the foreign country, whether there is an investment protection act. It is one’s homework. And, of course, of uttermost importance is understanding of mentality of the country you are going to operate.

Did our country help you to penetrate other markets?
I have business expertise in the United Kingdom, Russian Federation and Kyrgyzstan. I am a stakeholder also in the corporation Brīvais Vilnis, where many products are being exported. As of today I would say that my experience with the state of Latvia is rather positive in this regard...

Could you elucidate the story of the Kyrgyz bank Manas? You acquired it when it was on the verge of bankruptcy?
Our bank appeared in Kyrgyzstan after the revolution of 2005. An interesting place, small country, like Latvia, surrounded by big ones, like Uzbekistan, Kazakhstan... The easiest part would be obtaining of a new license to start operations. Yet in Kyrgyzstan, as in any country, they have their own red tape and their own economy protection methods. We did not
get a license to open a new bank, yet were offered an opportunity to acquire one of their banks on the verge of failure. There were enough of them. And I acquired a bank, which had already failed. After purchase of its license I paid out the money to depositors. It was much costlier as compared to a new license. Afterwards I filled it by hundred per cent with a capital required for a bank of such standings.

Was it a display of your good will?
You see, it is a business you need to consider many conditions. I was aware of the fact that the faith in banking system was undermined there and it was my task to restore it. And I made a step towards the goal. It was dictated by common sense. Of course, I could complain to our embassy about missing license, refer to the law...

All right. Afterwards there was a change of power in Kyrgyzstan. The bank was actually nationalized, which was a brazen violation of the investment protection act. Did the state of Latvia protect you when it happened?
Yes, Latvian Ministry of Foreign Affairs strongly supported our business, as far as they could. The embassy was working, the ministry closely kept an eye on the process, requested documents. Unfortunately, the agreement with the Kyrgyzs failed, which is why I turned to international arbitration. 

According to Kyrgyz newspaper Evening Bishkek, the burden of loss to Kyrgyzstan in case of failure to win the case might amount to some 100 million dollars. Do you verify this figure?
I’d say that they may lose several tens of millions. Actually, the arbitrage proceedings are in progress. Yet the final debates will take place in Paris, 18th to 21st of December. And the resolution will not be subject to appeal.

Idel Baisarov, the former state dignitary under the former president Roza Otunbayeva is rather pessimistic in his estimations when asked to assess the Kyrgyzstan’s chances to win the case. What about you?
I am sure about me being right and can assure everybody that I have abided by laws during the entire period of my operations in Kyrgyzstan. If you play fairly, you do not have reasons
to be scared. Anyway, I do not have any forecasts for as long as the court has not announced its resolution. The crux of the matter aside, of uttermost importance is also correct declaration, bringing of action, argumentation. If you have made even minor mistake, it may cause problems. So, the things are rather complicated...

There is another aspect to the story: Kyrgyzstan’s office of public prosecutor claims that Maxim Bakiyev has taken out the money through the bank Manas.
Accusations were made to a group of 32 persons: they include money laundering and god knows what other sins. The only thing that represents the facts with regard to me is that I know Bakiyev in person. There was a considerable report on the matter by international non-governmental organization Global Witness. It takes many tens of pages, yet the most intimidating accusation that was made against me - how is it possible to be friends with Bakiyev?!
As to the bank, it generated its first profits after three years of operations. Before that we invested more and more, opened branches, new directions... Everything had just started. And if there were any hidden things, then, believe me, they would have made headlines in mass media, including European countries. Unfortunately, there have appeared some not quite accurate publications since. Yet again, after some time the entities that have been involved have apologized publicly.

Do you mean German non-governmental organization Eurasian Transition Group (ETG)?
Yes. It was a great deed from their part — to actually sort out the matter. 

After eighteen months of publication of defamations whose source were the official Kyrgyz authorities?
The process of getting the matters straight took some time, yet they succeeded. And apologized publicly according to the German Law. You see, when Western non-governmental organizations are approached by a new state authority (especially after a revolution or coup-d’état), so-called new “democratic” power, people tend to believe it. They can not even imagine that a state dignitary might misguide them. Many Western governmental and non-governmental authorities and organizations have established their presence in emerging countries in good fight and been abused. They needed some time to see through the things.
The same applies also to Interpol. When the state of Kyrgyzstan approached Interpol to declare as wanted three people from Latvia, Interpol accepts such application, as it a priori believes in a state authority. However, afterwards, after requesting of certain documents they concluded that there are no reasons to declare people as wanted, and deleted all three names from the list.

Some observers note that the only step made by the state of Kyrgyzstan in the arbitration was to discredit your reputation. And that all these reports of independent organizations concur with this wish. Is it interrelated in your opinion or not?
Those who consider me guilty reason like this: he knew Bakiyev, which means that he necessarily used the connection. Probably many of them would if they were me. They can not even imagine that someone may come and work candidly. Yet step by step people sort out the matters and see: I really am waiting for the arbitration to put everything in their due places.
The United Kingdom this fall granted political asylum to Maxim Bakiyev: protected him from the Kyrgyz authorities, thus acknowledging that this persecution was in the first place political instead of being criminal.
As to the reputation risk, here the Kyrgyzs hit the sore point for anybody, their reputation. Do prove afterwards that they were wrong.
Anyway, I always try to meet my requirements by the maximum extent and build relations on fair grounds. It does matter to me. I can say that in the banking I have built up a reputation of someone who will never touch anything that does not belong to him. The customers who take out the loans from me by pledging their assets are not afraid that I could sell their assets and pocket the money. People know that in an emergency case I will take precisely my share and return theirs.

Russian press in Latvia to become Russian by hold?

What do you think about foreign business presence in Latvia?
For some reason we like it less (laughs). Anyway, being sensible people we are very well aware of the current open society model. If we want to become visitors we also need to let others visit us. There is a different matter. When we penetrate foreign markets we accept the local rules and do not attempt to change them. We find those rules biding upon us. This is why we so eagerly want others to find our rules binding upon them.

You mean anything in particular?
I closely watch Russian mass media in Latvia. Not only because I belong to Russian-speaking part of the population: I used to be the publisher of the Telegraph newspaper. And the principal mission, if you remember, was to discuss common human values of this country in Russian.
Sure, I am worried seeing what is going on with the Russian mass media in Latvia... There is nothing wrong with newspapers belonging to entrepreneurs, including foreigners. Yet, if our press is used to promote the interests of another country, the interests of foreign business, I disagree. It may apply no only to Russian industrialists, but also to Swedish, American, German entrepreneurs... I disagree with thrusting outsiders’ opinions on us. They might be all right, yet we are those who live in this country, and we are the hosts here. I think, we must strongly protect ourselves. There are strong traditions of Russian press since nineteen thirties, and we should keep them alive.

Do you think they might be in jeopardy?
I carefully read our Russian press and, if it could be called independent before, now it sounds like a press of some very limited group of Russian political power. There is a big difference. Even in Russia the variety of positions taken by mass media with regard to Russian power is much wider! 

Tatjana Fast, Vladimir Vigman

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