Following the requirements set out in the prosecutor's warning, the board of a/s “Latvijas valsts meži” (LVM) has initiated a comprehensive review into the legality, economic justification, compliance with good governance principles, and the best interests of LVM regarding long-term logging contracts (IML) and the IML transformation process established in 2013.

The LVM board has conducted an independent preliminary legal assessment of the long-term logging contract transformation process and concluded that an open and fair IML transformation process, consistent with good governance principles, may not have been ensured. The board has decided to launch a comprehensive audit of the IML and the IML transformation process.

The Prosecutor's Office also concludes that the long-term logging contract transformation process chosen in 2013 was not optimal and questions whether LVM’s governing bodies have done everything necessary to date to address the IML transformation issue in accordance with the operating principles of public institutions and public capital companies, including with regard to the conduct of public procurement.

Chairman of the Board of AS “Latvijas valsts meži” Pēters Putniņš: “It is important for the company's board to ensure effective management and the rational and economically sound use of resources, while observing the highest standards of good corporate governance. The board carried out the review without delay, as a result of which we have decided to initiate a comprehensive audit and will inform the public of its findings.”

Decisions taken by the LVM board and council in the period leading up to 2013 are the cause of the current situation regarding IML and IML transformation, as well as the findings of the Prosecutor's Office.

The company’s council will be informed of the decisions taken by the board.