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JSC Olainfarm suffered damages of several million euros

20:00 EDT 28 Oct 2019 | Globe Newswire

Joint stock company “Olainfarm” (hereinafter - Olainfarm) at the request of the person directing the proceeding, has engaged an independent, international auditor to verify the reasonableness of business activities and payments made for marketing services realized by previous higher level management. The audit found that at the beginning of 2017 former officials of Olainfarm on behalf of the company entered into a deal with Banestar Management Limited, a company registered in Cyprus, resulting in losses of several million euros to Olainfarm. Olainfarm has turned to the State Police with a request to recognize it as a victim within a criminal proceeding that had previously been initiated. Currently the active work has been done in order to accurately assess the amount of damages caused by the previous management, which is currently estimated at about  € 26 million euros. Suspicious transactions were performed from January 2, 2017 till April 4, 2019.

Olainfarm points out that work in the company do not continue certain employees who were involved in the process of concluding and implementing the above mentioned deal. Internal audits have also identified money disbursements and attempted disbursements based on forged documents. At the end of 2017, on the basis of forged documents, arrangements were concluded with the same key management personnel on payment of compensation in the event of termination of employment agreements, regardless of the reason for its termination. Such compensations range from EUR 42 000 up to EUR 144 000 per employee. Olainfarm has turned to the State Police with a request to initiate criminal proceeding.

Olainfarm continues to conduct internal audits evaluating other transactions concluded and implemented by the former higher level management in order to obtain assurance about legality and compliance with the interests of the company of these transactions.

JSC Olainfarm is one of the biggest pharmaceutical companies in Latvia with more than 45 years of experience in production of medication and chemical and pharmaceutical products. A basic principle of company's operations is to produce reliable and effective top -quality products for Latvia and the rest of the world. Products made by the Group are being exported to more than 60 countries of the world, including the Baltics, Russia, other CIS, Europe, Asia, North America and Australia.

Additional information:
Jānis Dubrovskis
Investor Relations Advisor of JSC Olainfarm
Phone: +371 29178878
Email: janis.dubrovskis@olainfarm.com

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