Poor management of Latvia’s state forest management company, Latvijas Valsts Mezi (LVM), led to major monetary losses, according to the State Audit Office (LRVK), LSM reported. The audit concluded that LVM’s management and the Ministry of Agriculture had failed to ensure sufficiently effective oversight of the company. The government’s decision to provide support to timber processors resulted in a revenue loss of EUR 49.4mn for LVM. Also, the Ministry of Agriculture had failed to transfer at least EUR 130.3mn to the state budget in additional dividend payments, the report stated. By the end of 2025, LVM had accumulated EUR 405.3mn of retained profit, and more than EUR 119mn in profits remained under the company’s control without a specific purpose, the audit found, LETA reported. Meanwhile, LVM had failed to implement EUR 47.5mn in investments over four years. Moreover, the auditors noted that Latvia’s forestry sector had been operating without a medium-term national policy since 2021.
Former agriculture minister Armands Krauze, several state officials, and executives at LVM and other forest industry companies are under criminal investigation in connection with the scheme to provide support to timber processing companies. Prosecutor General Armins Meisters accused Krauze of spreading “blatant lies” about his involvement in the case, LETA reported. Speaking in an interview with TV3, Meisters denied Krauze’s claims that he had been able to choose the timing of the searches that investigators carried out at his home and office. Meisters asserted that Krauze had not shown any genuine interest in cooperating with prosecutors in the case and that Krauze was staging a political show ahead of the parliamentary elections in October 2026. In response, Krauze insisted that Meisters was spreading false information and vowed to take legal action if he refused to retract his statements, LSM reported. Krauze is chairman of the Union of Greens and Farmers (ZZS), which is part of Latvia’s outgoing coalition.