KALININGRAD, November 8 (RIA Novosti, Anatoly Nilov) - The Kaliningrad region plans to appeal a Vilnius court ruling sanctioning the sale of its property in Lithuania, governor Georgy Boos said Tuesday.
"We are preparing an appeal," Boos said commenting on the court's Friday decision to sell a building belonging to the Kaliningrad regional office in Lithuania as pay-off for a $10 million loan that was acquired by regional authorities from Dresdner Bank AG in February 1998. "In our opinion, the court has made several technical mistakes, and we are going to summarize our claims in the appeal," the governor said.
The former governor of the Kaliningrad region, Leonid Gorbenko, said he was planning to use the loan to develop poultry farming in the region. However, the loan was misused and the regional administration refused to pay it off.
The German bank transferred the loan claim rights to Cyprus-based Duke Investment Limited, which in turn appealed to the International Court of Arbitration in London.
In October 2004, the panel of judges of the International Court of Arbitration ruled that the warrantor, or the regional budget, should pay about $20 million to the creditor, including $9.6 million in accrued interest. Each year of delinquency will cost another 19.75% of the total sum. The value of the building in Vilnius is estimated at $25 million.
"Next year's budget does not include payments of the loan," Boos said. "It is not even documented properly, and we are reviewing it at present."
The governor said he was against any fuss being raised around the situation. "When we solve the problem, we will tell everybody all the details," he concluded.
