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Latvian police probe Ukrainian oil rig deal

Yulia Tymoshenko. Photo: EPA.
 RIGA, Dec 19 - Latvian police said on Wednesday that they were probing a company implicated in an alleged multi-million dollar Ukrainian corruption scandal flagged up by Ukraine's jailed opposition leader Yulia Tymoshenko, the AFP News Agency reports.

State Police spokeswoman Lita Juberte told AFP that accounts held by Britain-registered ''Highway Investment Processing'' had been frozen at the Latvian bank ''Trasta Komercbanka'' as part of the investigation.

The move followed a complex sequence of events starting in April 2011, when an oil rig was sold by Norwegian company ''Seadrill'' to ''Highway'' for USD 248.5 million.
''Highway'' then won a Ukrainian government tender to re-sell a rig with similar specifications to Ukraine's state oil company ''Chornomornaftogaz'' for USD 400 million.

Bidding against ''Highway'' in the tender was New Zealand-registered company ''Falcona Systems''.

However, both ''Highway'' and ''Falcona'' list Latvian Eriks Vanagels and a Stan Gorin as directors.

Gorin, who has a small insurance office in Riga, has denied any knowledge of the directorships.

Vanagels, meanwhile, is reportedly a poverty-stricken pensioner with no connection to the world of big business, leading to suspicions that the men were unwitting nominee directors of "shell" companies.

The murky deal has caused a major scandal in Ukraine, with claims that the tender was a sham and that the difference between the purchase and sale price was laundered via Latvian boutique banks.

In May this year, Tymoshenko called for an international probe into the state purchase of several drilling rigs.

Ukrainian authorities have denied the accusations, saying that the higher costs were due to transport costs and installing extra equipment.
hey have also accused opponents of wanting to hamper Ukraine's exploration of the Black Sea, believed to be rich in hydrocarbons.
Ex-prime minister Tymoshenko is serving a seven-year prison term for abuse of power in a case that she calls revenge by her political foe, President Viktor Yanukovych.

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