Digital TV deal under fire

Latvian gov't to probe pact involving Brit company

This article was updated at 8:30 p.m. PT on July 16, 2003.

AMSTERDAM — Latvia’s Prime Minister Einars Repse has ordered a government probe into the multimillion-dollar agreement with a little-known British company that introduced digital TV into Latvia.

Repse alleges that the government was told the entire cost of the launch of DTV in the capital of Riga and surrounding areas would run to $53 million, when it is now expected to be triple that amount.

The order comes after the country’s Corruption Prevention and Combating Office had already begun to investigate the actions and costs relating to the contract between the Latvian Digital Radio and Television Center (DLRTC), a company indirectly owned by the state, and the London-registered Kempmayer Media.

However, aside from initial testing, no work appears to have been done on the digital TV project, according to Repse’s spokeswoman Kristine Juckovica.

“Neither the prime minister nor any of our cabinet officers know anything about Kempmayer Media,” said Juckovica.

The government has frozen the DLRTC’s accounts and Repse has said the investigation could lead to criminal charges.

Repse has asked transport minister Robert Zile to produce a report by Aug. 1 on the circumstances behind the agreement, if it should or can be terminated and if the management of DLRTC should be replaced.

DLRTC claimed that the contract with Kempmayer was approved by a former minister of transport before the government changed hands last year. Kempmayer has a subsidiary in Latvia that has been in existence since the contract was signed but little is known about the London-based parent. The DLRTC said it has dealt only with the Latvian subsid.

Janis Jankovski, a consultant with the state chancellory, said the real problem is that “the government has never approved the startup of digital TV” in Latvia and DLRTC appears to have jumped the gun by striking the pact and failing to notify the government.

The deal came to light when DLRTC was asked to provide a credit guarantee that would make the government financially responsible for the entire deal with Kempmayer.

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