When John Christmas learned in August 2004 that the financial statements of his employer, Parex Bank, were false, he blew the whistle as required by law. He gave a long list of frauds to Ernst & Young Baltics partner Valters Kronbergs. If Ernst & Young had withdrawn its audit opinions, as required by law, then the Latvian Financial Crisis never would have happened. Latvia would have a thriving economy today, like its neighbor Estonia.
Unfortunately, Kronbergs reacted to the whistleblowing by sometimes denying that the whistleblowing took place and sometimes getting angry at the whistleblower. The auditors refused to investigate the frauds and continued to sign Parex annual reports until 2009, after the nationalization.
Many more Parex frauds have been revealed in recent years, but the Ernst & Young auditors don’t care. They refuse to withdraw their opinions.
Below is an email in which Kronbergs denied the whistleblowing. It is a simple matter to analyze the wording of this email and determine that he was lying.
And, this paragraph is from a businessman who wrote to Christmas after seeing Kronbergs. While Kronbergs was denying that the whistleblowing occurred in emails, he was telling people that Christmas was a horrible person for being a whistleblower.
“Where are you? Still in Spain? What are you up to? I understand that you are not too popular in some quarters in Riga, especially dangerously – Parex – and some of the ex-pats [Valters Kronbergs] you apparently included in your assault on Parex? So I heard, but that does not mean any of it is true or otherwise.”