Lithuanian Prime Minister Gintautas Paluckas in 2012 purchased an apartment in a dilapidated building in the Šnipiškės neighbourhood of Vilnius for €16,500 from a Cyprus-registered company, Laisvės TV and investigative journalism centre Siena reported Wednesday.
The apartment had previously been purchased in 2008 by Gradec Limited for €107,000. The company’s ownership is obscured by a complex shareholder structure, raising questions about why Paluckas was able to acquire the property at such a significant discount.
Gradec Limited had acquired the 54-square-meter apartment, located in a building constructed in 1940 on Lvivo Street, shortly before the global financial crisis, which caused a steep drop in real estate prices.
PM calls it a failed investment
Paluckas still owns the apartment and described the purchase as part of a failed investment project.
He said he was familiar with the individual who represented Gradec Limited in the transaction but only identified the person as “a private individual, J.A.”
“The premises (usable area – 34 sq. meters) were acquired as part of an investment project and, in my view, reflected market value considering the actual condition of the property and building,” Paluckas said in a statement.
According to Paluckas, the company’s representative told him that Gradec Limited launched an investment project in 2008 to buy out the remaining apartments from other residents at Lvivo Street 56, amend the zoning plan, design a new building, and either sell or develop the project.
“Negotiations were ongoing over the final two units. An agreement was reached on the purchase price. I don’t know what determined the original high price, but I believe it was due to the fact that these were the last unsold units,” Paluckas said. “Ultimately, only one apartment – the one I bought – was acquired. The other owner backed out at the last minute, and the project stalled for years, as did my investment.”
Land lease raises further questions
Though Gradec Limited was dissolved in 2016, it remains the official leaseholder of the state-owned land beneath the building on Lvivo Street 56.
Vilnius city officials confirmed that the plot on which the building stands was formally registered by Paluckas himself while he was serving as the director of the city’s administration.
According to the investigative report, Gradec Limited never paid rent to the city, despite leasing the land until 2040.
Paluckas said he was informed that the company’s funding came from a loan provided by a private individual, who was likely the company’s ultimate beneficiary.
Financing of personal property purchase detailed
The report also details Paluckas’ 2013 purchase of a 127-square-meter apartment on Trinapolio Street in Vilnius for €223,000.
He said the funds came from the 2011 sale of a previously owned apartment in Žirmūnai for nearly €90,000, as well as the sale of two motorcycles, a car, family savings, and a bank loan.
“In total, proceeds from property and other asset sales in 2011 and 2013 amounted to 424,000 litas (excluding family savings, employment income, income from self-employment, and the bank loan),” Paluckas said. “This information is available to law enforcement through state registries.”
Lithuania’s Special Investigation Service (STT) and the Financial Crime Investigation Service (FNTT) have launched pretrial investigations in response to media reports regarding the prime minister and related entities.
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