In what has been called Norway’s biggest corruption scandal ever, four former top executives of fertiliser giant Yara have been indicted for “aggravated bribery” in Libya, India and Russia. In a 12-week trial that started at the Oslo District Court last week, all four pleaded not guilty.
The trial has triggered off discussions in Norway about the ethics of business deals in foreign countries. A few years ago, Norwegian companies could get tax rebates for paying officials kickbacks in foreign deals, but offering or accepting a bribe anywhere is now regarded as a criminal offence.
Økokrim, the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway, started investigating corruption charges against Yara in 12 countries in 2011. Last January, Yara pleaded guilty to corruption charges and was fined 270 million Norwegian kroner (Rs 221 crores), while another 25 million kroner were confiscated from the fertiliser company.
The focus at the start of the trial has been on money paid in 2007 to an Indian consultant who is the son of a senior official in the Indian Ministry of Chemicals & Fertilisers.
Indian political processes
The indictment includes two charges of gross corruption and bribery in Libya and India. Yara, one of Norway’s largest companies that produces fertilisers and other chemicals, allegedly paid $1 million to Gurpreetesh Maini, the son of senior Indian official Jivtesh Singh Maini, to secure a contract with Krishak Bharati Cooperative Limited for an Indo-Norwegian joint venture.
“We want to prove that the payments were made to Gurpreetesh Maini because his father held a senior position that could affect Yara’s relationship with the company they wanted to do business with, as well as Yara’s influence on political processes in India,” police attorney Helene Bærug Hansen in Økokrim said in court last Tuesday.
Bærug Hansen presented several documents in court that showed that Yara executives Daniel Clauw and Kenneth Wallace negotiated directly with Gurpreetesh Maini. Along with the former chief executive officer of Yara, Thorleif Enger, the two have been accused of serious corruption for their agreement with Gurpreetesh Maini.
Lebanese investor's role
Ely Calil, a Lebanese investor based in London, had also played a vital role in the deal with Gurpreetesh Maini, according to Bærug Hansen. Calil is known for his extensive network of contacts throughout the world, and has been linked to several contentious issues.
Økokrim submitted several emails in court showing that Calil was involved in the negotiations with Gurpreetesh Maini. It also presented a draft agreement between Calil and Yara. Økokrim stated it had not found any signed agreement between Calil and the Norwegian fertiliser company.
Former executive Tor Holba was charged with corruption for paying kickbacks to the son of Libyan Oil Minister Shokri Ghanem in connection with the construction of a fertiliser factory in Libya.
Passivity and complicity
Former CEO Enger was not specifically involved in unlawful transactions, but Økokrim believes it can prove that he sanctioned bribes.
“We believe we can prove that Enger endorsed bribery, but we are not saying that he was specifically involved in banking transactions,” said chief public prosecutor Marianne Djupesland to nrk.no.
In her opening argument in court, Marianne Djupesland distinguished between physical and psychological involvement. Djupesland said that Økokrim will not seek to prove that Enger and Tor Holba handed over bribes themselves.
“Passivity can strengthen a person’s criminal intent,” Djupesland said. “The inaction of a manager may prompt a criminal offense.”
'Hired a talented consultant'
The investigation has created a lot of paperwork. Four large cartons containing 5,400 pages of documentation were wheeled into court last Monday. The evidence submitted by Økokrim includes emails, reports and documents showing that money went from the company to accounts in tax havens. In addition, the defence attorneys have submitted around 1,000 documents.
Defence attorney Berg presented on Wednesday a long list of documented tasks Gurpreetesh Maini had performed in conjunction with Yara’s project in India. The agent had arranged visas for Yara representatives, made hotel bookings and acted as a liaison between Kribhco and the Norwegian fertiliser giant. An annual fee of $1 million was therefore neither inappropriate nor disproportionate, he stated.
According to the Norwegian newspaper Dagens Næringsliv, Enger has previously asserted that the agreement with Gurpreetesh Maini was an ordinary consultant agreement.
“My impression was that we had acquired a talented consultant in India,” said Enger. “To use consultants in new markets is common, and not illegal. I see this as a very normal case.” He added that the million dollar payment was made as compensation.
“We came to the conclusion that Kribhco was a large, bureaucratic and complicated company,” Enger told Dagens Næringsliv. “It was not a company we wished to work with. When we ended the consultant agreement the consultant was given compensation.”
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The trial has triggered off discussions in Norway about the ethics of business deals in foreign countries. A few years ago, Norwegian companies could get tax rebates for paying officials kickbacks in foreign deals, but offering or accepting a bribe anywhere is now regarded as a criminal offence.
Økokrim, the National Authority for Investigation and Prosecution of Economic and Environmental Crime in Norway, started investigating corruption charges against Yara in 12 countries in 2011. Last January, Yara pleaded guilty to corruption charges and was fined 270 million Norwegian kroner (Rs 221 crores), while another 25 million kroner were confiscated from the fertiliser company.
The focus at the start of the trial has been on money paid in 2007 to an Indian consultant who is the son of a senior official in the Indian Ministry of Chemicals & Fertilisers.
Indian political processes
The indictment includes two charges of gross corruption and bribery in Libya and India. Yara, one of Norway’s largest companies that produces fertilisers and other chemicals, allegedly paid $1 million to Gurpreetesh Maini, the son of senior Indian official Jivtesh Singh Maini, to secure a contract with Krishak Bharati Cooperative Limited for an Indo-Norwegian joint venture.
“We want to prove that the payments were made to Gurpreetesh Maini because his father held a senior position that could affect Yara’s relationship with the company they wanted to do business with, as well as Yara’s influence on political processes in India,” police attorney Helene Bærug Hansen in Økokrim said in court last Tuesday.
Bærug Hansen presented several documents in court that showed that Yara executives Daniel Clauw and Kenneth Wallace negotiated directly with Gurpreetesh Maini. Along with the former chief executive officer of Yara, Thorleif Enger, the two have been accused of serious corruption for their agreement with Gurpreetesh Maini.
Lebanese investor's role
Ely Calil, a Lebanese investor based in London, had also played a vital role in the deal with Gurpreetesh Maini, according to Bærug Hansen. Calil is known for his extensive network of contacts throughout the world, and has been linked to several contentious issues.
Økokrim submitted several emails in court showing that Calil was involved in the negotiations with Gurpreetesh Maini. It also presented a draft agreement between Calil and Yara. Økokrim stated it had not found any signed agreement between Calil and the Norwegian fertiliser company.
Former executive Tor Holba was charged with corruption for paying kickbacks to the son of Libyan Oil Minister Shokri Ghanem in connection with the construction of a fertiliser factory in Libya.
Passivity and complicity
Former CEO Enger was not specifically involved in unlawful transactions, but Økokrim believes it can prove that he sanctioned bribes.
“We believe we can prove that Enger endorsed bribery, but we are not saying that he was specifically involved in banking transactions,” said chief public prosecutor Marianne Djupesland to nrk.no.
In her opening argument in court, Marianne Djupesland distinguished between physical and psychological involvement. Djupesland said that Økokrim will not seek to prove that Enger and Tor Holba handed over bribes themselves.
“Passivity can strengthen a person’s criminal intent,” Djupesland said. “The inaction of a manager may prompt a criminal offense.”
'Hired a talented consultant'
The investigation has created a lot of paperwork. Four large cartons containing 5,400 pages of documentation were wheeled into court last Monday. The evidence submitted by Økokrim includes emails, reports and documents showing that money went from the company to accounts in tax havens. In addition, the defence attorneys have submitted around 1,000 documents.
Defence attorney Berg presented on Wednesday a long list of documented tasks Gurpreetesh Maini had performed in conjunction with Yara’s project in India. The agent had arranged visas for Yara representatives, made hotel bookings and acted as a liaison between Kribhco and the Norwegian fertiliser giant. An annual fee of $1 million was therefore neither inappropriate nor disproportionate, he stated.
According to the Norwegian newspaper Dagens Næringsliv, Enger has previously asserted that the agreement with Gurpreetesh Maini was an ordinary consultant agreement.
“My impression was that we had acquired a talented consultant in India,” said Enger. “To use consultants in new markets is common, and not illegal. I see this as a very normal case.” He added that the million dollar payment was made as compensation.
“We came to the conclusion that Kribhco was a large, bureaucratic and complicated company,” Enger told Dagens Næringsliv. “It was not a company we wished to work with. When we ended the consultant agreement the consultant was given compensation.”