The "Eurocolumna cartel" was ruined by a small clerk at the Competition Office who realised that the trust was trying to gain monopoly on the Romanian fertiliser market, said prosecutor-inspector Carmen Popa, of the Bucharest Court of Appeals, during a seminar held on June 26-28 in Mangalia. One of the cases in the Eurocolumna crime chain is under investigation at the Bucharest Court of Appeals. Investigations will focus on the Swiss citizen Josef Fassler, who in 1994 founded a Swiss company, Manel Finanz, where he owned 99% of the stock.
The beginnings
Two weeks after establishment, Manel Finanz sets up Banca Columna in Romania, where it also owns 99% of the stock. The same Josef Fassler also holds 98% in Swiss company Aledo Commerce.
In 1995, Aledo Commerce (through Josef Fassler), a non-resident company in Romania, secures a $5 million bank loan backed by Eurotrading Chemicals (a majority shareholder in fertiliser producers Amonil Slobozia and Turnu). According to Popa, the money was lent by Banca Columna, without the knowledge and assent of the National Bank of Romania, in breaching banking legislation. The $5m loan was used by Aledo Commerce to buy fertilisers on the Indian market.
As the Swiss company failed to repay the loan entirely, with the assent of Banca Columna, Eurotrading Chemicals (and therefore Amonil Slobozia and Turnu) took over part of the debt, although the two Romanian companies had no economic, financial or commercial relationship with the foreign company. As a result, the Romanian companies supported the interest, banking charges, and some of the instalments the Swiss debtor failed to repay.
The Eurocolumna Cartel and money laundering
The Eurocolumna Cartel was aimed at money laundering; only part of the crime chain occurred on Romanian territory; illicit money was later transferred across the border, Carmen Popa said.
The Eurocolumna "conglomerate" comprises more than 40 resident and non-resident companies with Romanian and foreign participation, as well as a foundation that enjoys financial facilities under Romanian law, and a bank that carries virtually all economic and financial operations, Popa said.
Shareholders in all companies of the Eurocolumna trust are the same individuals, but with differing stakes. The companies most active on Romanian territory have been Eurotrading Chemicals, Eurotrading 2000, the Columna Foundation, Eurohouse 2000.
These companies have been particularly involved in the production and sale of chemical fertilisers.
In 1996, Eurotrading Chemicals became a majority shareholder in Amonil Slobozia and Turnu. It also made a bid for Azomures, but it was turned down.
The first major money laundering operation took place with the privatisation of SC Turnu SA, in Turnu Magurele.
To acquire the majority stake, Eurotrading Chemicals shareholders were to pay 105,800,000,000 lei, of which 42,300,000,000 lei within a month, and then contribute gradual instalments of a given amount.
Eurotrading doesn't pay
Eurotrading Chemicals could not afford or did not intend to pay any amount, Popa said. Still, company shareholders knew that legislation permitted a number of privatisation facilities in some circumstances. They persuaded then the director of SC Turnu to falsely notify the state of the existence of tens of billions of dollars to a German company. Apparently, Banca Columna loaned $10 million so Turnu can repay the non-existent debt, by means of an association contract between Eurotrading Chemicals, Banca Columna and Turnu.
It must be said that Turnu never received the $10 million. According to prosecutor Popa, out of its own initiative and without the instructions of the debtor (the loan beneficiary), Banca Columna transferred the $10 million into an account opened with the AWT International Bank in Vienna, as a personal deposit. The money was transferred before the credit convention was signed with SC Turnu, that is, before it was known whether the company would contract the loan and use it in this fashion. Two days after the deposit was established, Banca Columna again transmitted to Credit Anstall a payment order for $10 million, through AWT International, into the account of German company Metallgeselschaft. Only after these operations were completed was the credit convention signed between Banca Columna and Turnu, according to which the $10 million were earmarked to cover the debt.
Forged documents
SC Turnu directors forged company accounting documents to receive 25 billion lei in a grant from the state, according to Law 55/1995, which grants financial facilities for privatisation.
The money thus received went to Banca Columna as a refund on the $10 million loan.
With this money, Eurotrading bought the majority stake in SC Turnu. In other words, using tampered accounting documents, Eurotrading Chemicals bought the majority stake in SC Turnu with the Romanian state's money.
Through the association contract signed between the three companies (Banca Columna, Eurotrading Chemicals and Turnu), Eurotrading Chemicals obtained a 300bn lei profit on exporting fertilisers produced in Turnu.
For every export document they acted on, Eurotrading and Turnu signed contracts that entitled Eurotrading to hard currency commissions.
For each operation, Eurotrading Chemicals illegally cashed in amounts classified as profit and commissions worth 300 million lei and $2.3 million, which it used to pay the investment obligations it assumed when buying the majority stake. After becoming a majority shareholder in Turnu, Eurotrading introduced more companies in the trust into the business circuit, including Eurohouse 2000, the Columna Foundation and Banca Columna.
Sponsorship for the Columna foundation
Eurotrading used its relationship with the management at SC Turnu, which it prompted to extend a $300,000 sponsorship to the Columna Foundation, although this is illegal under sponsorship legislation, particularly since the Romanian company had financial difficulties. After receiving the sponsorship, the Columna Foundation signed a constructions contract with a "sister" company," Eurohouse 2000, which would built apartments for SC Turnu employees. Thus, the foundation left the impression that it was living up to its humanitarian goals, and Eurohouse 2000 posted a profit, leaving the impression that SC Turnu received employee apartments for free, whereas in reality the beneficiary did pay. The directors of SC Turnu received luxury cars from the Columna Foundation as a reward for the sponsorship, Carmen Popa added.
The Eurocolumna Group, through its shareholders, has set out to obtain significant amounts of money and later take it out of Romania. Eurotrading Chemicals persuaded Amonil Slobozia and Turnu to sell it their entire output of fertilisers in 1995-1997, within exclusive dealership contracts.
The selling price was much below domestic and international levels, prompting anti-dumping reactions from foreign producers. The price was even below the one imposed by the Competition Office.
Further, Eurotrading sold as export chemical products to "sister" companies (Fert Invest or Aledo Commerce), with prices lower than it paid the Romanian producers. These export sales at the acquisition price were intended to omit profit filing by the non-resident exporter, Eurotrading Chemicals, which thus dodged profit taxes and customs duties.
Only after the merchandise was exported, Fert Invest or Aledo Commerce sold it at real prices on the international market, so profits were scored abroad.
To Eurotrading Chemicals, it was irrelevant that it had no profit in the country, because large profits were derived abroad by companies with the same shareholders, said Popa.
In these cases, amounts obtained illegally with domestic and foreign sales, in breaching the Romanian legislation, were legalised through sales at real prices on the international market, prosecutor Carmen Popa said, adding that the money would never return into the country. Mediafax
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