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Mayor of central Latvian municipality resigns over 200-mln-euro loan scandal

Xinhua, December 2, 2015 Adjust font size:

The mayor of the central Latvian municipality of Lielvarde tendered resignation on Tuesday after trying to secure a 200-million-euro (about 212 million U.S. dollars) loan from an offshore firm on behalf of the local authority.

Vita Volonte, who was appointed acting Lielvarde mayor, said citing information from the Treasury of Latvia, that former Lielvarde mayor Janis Abolins had signed a promissory note to receive 200 million euros from Riverside HK Ltd, an offshore firm registered in Liechtenstein.

He then sought the Treasury's approval and guarantee for the deal.

The Treasury reported the suspicious deal to the Finance Ministry, which called on the Lielvarde local authority to suspend Abolins' powers and transfer all its accounts to the Treasury.

According to explanations provided by Abolins, the money was not meant to be a loan, but a deposit Lievarde would have used to attract funding for its infrastructure projects like road construction and development of water supply and sewerage systems.

Finance Ministry representative Aleksis Jarockis called Abolins' dealings a fraud scheme unprecedented in a 21st century EU member state.

The Lielvarde local council on Tuesday unanimously accepted Abolins resignation and asked law enforcement authorities to probe the former mayor's actions. Endit