Norway exposes kickbacks in aborted Indian fertilizer deal
18 Jan 2014
After Norwegian authorities blew the lid off yet another scam in India – this time related to fertilisers – the union fertiliser ministry said today that it is looking into the matter.
The Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Oekokrim) on Friday imposed a fine of $48 million on fertiliser maker Yara for bribing the kin of a senior government official in India as well as others in Libya and Russia.
Despite the alleged kickbacks, Yara's attempts to set up a joint venture with the Indian fertiliser cooperative Krishak Bharati Cooperative Ltd (Kribhco) failed.
''We have read the report. We are looking into matter,'' fertilisers secretary Shaktikanta Das said. Kribhco has denied any wrongdoing by its officials.
Norwegian police said they had indicted four former executives of fertilizer maker Yara, including its former chief executive and its top legal counsel, for paying about $8 million in bribes. Local media reports said investigators had found that Yara illegally paid $1 million to an Indian bureaucrat's son to clinch the Kribhco deal.
They said Yara executives bribed officials, including the family of former Libyan leader Muammar Gaddafi's oil minister and the family of a financial adviser in India's ministry of chemicals and fertilizers, committing gross corruption, which carries a maximum prison term of 10 years.
Oekokrim - the economic crime unit of the national police - said on Friday it had indicted former CEO Thorleif Enger, former chief legal officer Kendrick Wallace, former head of upstream activities Tor Holba and former deputy CEO and current Potash Corp director Daniel Clauw for either directly negotiating the payments or consenting as the firm tried to establish joint ventures in the two countries.
Enger, Holba and former chief financial officer Hallgeir Storvik were first detained and charged in May 2012. The charges against Storvik have been dropped, Yara said in a statement on Friday.
The formal indictment means the case will now go to trial.
Yara, one of the world's biggest fertilizer companies, was fined 295 million crowns in the case earlier this week. The firm acknowledged that improper payments had been made and accepted the fine.
However, it said on Thursday that all persons involved in the case "are considered innocent until proven by a court to be otherwise".
Enger and Holba have denied all charges. Wallace and Clauw could not be reached for comment. Potash Corp declined to comment.
Holba, the only one to remain with Yara, has been placed on paid leave.
Yara launched an internal investigation in 2011 saying that irregularities might have occurred before 2008, then contacted the police.
The case has attracted strong criticism from some Yara shareholders, including the government, which holds 36.2% and the state-owned pension fund Folketrygdfondet, the firm's second-largest shareholder.
