The Kaunas District Court has scheduled a hearing for June 17 to address a lawsuit filed by D. Šidlauskas, a shareholder holding approximately 40% of the shares in East West Agro (EWA). The legal action seeks to impose administrative responsibility on the company’s CEO, G. Kvietkauskas, following disputes over corporate transparency and financial dealings.
D. Šidlauskas, who formerly served as EWA’s finance director until his dismissal in November, alleges that the company has engaged in questionable transactions and payments to related parties. He claims that he has been denied access to information regarding these financial activities, which he estimates could involve millions of euros and potentially impact the company’s financial position.
Specific concerns raised by D. Šidlauskas include loans and management fees linked to G. Kvietkauskas, his spouse and her company “Gesons,” the “Multi Asset Selection Fund,” as well as board member Linas Strėlis and his company “Biglis.” D. Šidlauskas also intends to challenge in court a transaction involving the acquisition of a 10.3% stake in EWA by “Gesons,” which he alleges was funded through a loan from EWA.
Did You Know?
Did You Know? EWA reported an audited net profit of 2.42 million euros for 2025, marking a 55% increase compared to the previous year, with total revenue reaching 41.9 million euros.
Expert Insight:
Expert Insight: These developments underscore the heightened risks associated with governance in publicly traded firms where transparency between major shareholders and executive leadership breaks down. The shift from internal boardroom disagreement to formal legal proceedings often signals a prolonged period of uncertainty for investors, potentially impacting market confidence and stock volatility on the First North alternative market.
G. Kvietkauskas has formally rejected the allegations, describing them as baseless. He maintains that loans to shareholders are a standard business practice and asserts that neither he nor his related companies currently hold any outstanding financial obligations to EWA. He further emphasized that the company operates in compliance with legal requirements and stated that disputes should be resolved through civil, legal channels that do not harm the company’s reputation or interests.
Financial reports submitted to the Register Centre for 2025 indicate that G. Kvietkauskas received 399,000 euros in loans that year, following 101,000 euros in 2024. By the end of 2025, his debt to the company stood at 415,800 euros. The company recently saw disagreement among shareholders regarding profit distribution, resulting in a decision not to pay dividends for the current year, a move G. Kvietkauskas attributed to the need to maintain a financial reserve.
Related Concerns: “Gesons” and Transparency
D. Šidlauskas also raised concerns regarding a 3.5 million euro bond issue by “Gesons” earlier this year. Following his inquiry to the Bank of Lithuania regarding the transparency of the offer, the central bank noted that it does not verify crowdfunding proposals and that the responsibility for the accuracy of information lies with the project owner.
While “Gesons” initially mentioned a management fee paid by EWA as a potential source for bond interest payments, the company later clarified that such a fee would not be applied. “Gesons” maintains that its bond interest will be covered by its own general income and cash flows, which include revenue from consulting and investments in the technology startup “Pulsetto.”
Frequently Asked Questions
What is the primary reason for the lawsuit?
The lawsuit concerns the alleged lack of transparency regarding transactions and payments between EWA and related parties, for which D. Šidlauskas claims he has not received requested information.
How has the CEO responded to these accusations?
G. Kvietkauskas has labeled the claims as baseless, asserting that the company follows all legal requirements and that current loans are not an issue as no outstanding obligations to EWA exist.
What is the status of the dividend payments?
Shareholders did not approve the board’s proposal to pay dividends this year, with management citing the necessity of building a financial reserve.
How might these ongoing boardroom disputes influence the long-term strategic direction of the company for its minority shareholders?
