Ex-head of Latvian Railway might have been bribed by Estonia's Oleg Ossinovski - daily

Photo: Liis Treimann / Postimees

Ugis Magonis, the former president of Latvia's state-owned railway company Latvijas Dzelzcels who was detained on Thursday night by the Corruption Prevention and Combating Bureau (KNAB), might have been bribed by Estonian businessman Oleg Ossinovski, the Latvian daily Diena reported over the weekend.

According to the daily, Magonis might have been bribed with 500,000 euros in connection with a tender to buy four diesel locomotives organized by the railway company's subsidiary, LDZ Ritosa Sastava Serviss Ltd., which was won by Ossnovski's company Skinest.

«It is clear, there was a huge bribe and there is evidence,» a source requesting anonymity told the newspaper. According to the source KNAB also searched the offices of LDZ Ritosa Sastava Serviss trying to find documents regarding the connection between the Latvian company and Skinest.

The old 2TE116-type diesel locomotives acquired as a result of the tender were in different conditions but each cost 2 million euros or more, Diena reports. «We believed that it was more beneficial to buy the locomotives than to rent them,» an official who was familiar with the tender's background told the newspaper.

The tender which ended in April was won by Skinest and by now two locomotives have been delivered, Diena reports. Due to ties with Russian manufacturers and the Swiss train manufacturer Stadler, Skinest is by now one of the main suppliers of the Latvian railway company, the daily reports.

According to Diena's sources Magonis was arrested on Thursday when he returned from a conference in Estonia.

Ossinovski owns more than 70 percent of the shares of Daugavpils Lokomotivju Remonta Rupnica through Skinest Rail and investment company Spacecom. Skinest has a subsidiary in Latvia, Skinest Latvija, the turnover of which was 14.2 million euros in 2014.

KNAB detained Magonis on Thursday night, Latvian Transport Minister Anrijs Matiss told BNS. He added that anti-corruption officers also conducted a search at Magonis's office on Thursday.

Magonis was fired as the railway company's head on Friday.

The Riga Regional Court on Saturday ruled to remand Magonis in custody. His lawyer Alvis Marga would not disclose the argumentation behind the court's decision to keep his client in custody but said he would appeal the ruling.