Lithuania’s national development bank, ILTE, has launched an unscheduled audit following allegations concerning the possible misuse of a preferential loan linked to Prime Minister Gintautas Paluckas’ business interests.
The probe comes after Andrius Tapinas, a journalist and public figure, posted on Facebook on Thursday that funds from a €200,000 subsidised loan awarded to the company Garnis – in which Paluckas owns a 49% stake – may have been improperly diverted to a related company, Emus, which is also partially owned by the prime minister.
According to Tapinas, communications between unnamed parties and representatives of Garnis and Emus suggest that goods paid for using Garnis’ loan funds were delivered to Emus. Emus, however, would not have qualified for the loan due to its operational history, raising suspicions the companies were acting as a group to secure ineligible funding.
ILTE told BNS on Friday it had initiated a review in response to the public allegations.
“As in all cases where doubts arise or negative information about ILTE-financed clients emerges publicly, an unscheduled inspection has been initiated due to concerns about the potential misuse of loan funds,” the bank said.
The bank said it would assess all available information and contact the company involved to clarify the situation and ensure the funds were used appropriately.
Should suspicions of improper fund usage be confirmed, ILTE pledged to report the matter to authorities and carry out standard procedures for loan violations.
According to ILTE, Garnis has so far received €34,800 of the €200,000 loan, with about 60% used for wages, related taxes, and routine business expenses. The remainder went to suppliers based on submitted invoices.
The Special Investigation Service (STT) confirmed it is reviewing media reports related to the case.
Paluckas repeated on Friday he was not involved in the management of either company.
“I have said numerous times and I can only repeat that I am not involved in the activities or management of these companies in any form, and therefore any questions related to these activities, raising suspicions or doubts, must be referred to the relevant authorities, and these authorities will respond to any doubts or even suspicions of irregularities and arising questions,” the prime minister told reporters in Riga on Friday.
The investigative journalism outlet Siena and Laisvės TV reported Wednesday that Garnis received the subsidised loan in early February under the Startuok programme, designed to support young small- and medium-sized enterprises.
Concerns have been raised that Garnis may have been created to bypass eligibility rules, which prohibit companies that belong to a group or have operated too long from receiving such loans. Emus, which Paluckas owns 51% of, would not have qualified due to its established business history. Had the two firms been formally linked, Garnis would have been ineligible as well.
Paluckas has insisted that he does not participate in Garnis’ operations and saw no reason to recuse himself from recent government decisions related to ILTE. In February and March, the government approved amendments governing ILTE and set borrowing limits for state entities, including the bank – decisions Paluckas was involved in.
The prime minister has asked the Chief Official Ethics Commission to review the situation but maintains he did not mix public and private interests.
ILTE said it conducted a preliminary review of the disbursement process to ensure payments aligned with the loan’s intended purpose. A full internal audit is expected within a week.
Former Garnis director Andrius Aglinskas and current director Artūras Lapinskas were both reportedly involved in the correspondence cited by Tapinas. Aglinskas declined to comment when contacted by BNS on Friday.
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