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Monday, June 17, 2024

Former Yara CEO also faces charges

UPDATED: The former chief executive of industrial concern Yara has also been charged in an expanding corruption case against the state-controlled company. Thorleif Enger was arrested along with two other top Yara executives, who since have been demoted while an investigation continues into their role in bribery charges. All three men were released by police after questioning, but continue to face personal charges along with those filed against the company.

Hallgeir Storvik PHOTO: Yara

Yara sent a message to the Oslo Stock Exchange on Monday that Hallgeir Storvik, who has served as Yara’s chief financial officer and head of strategy, and Tor Holba, senior vice president and head of upstream, were “stepping out of” their top positions immediately and “at their own request” while an investigation by Norway’s economic crimes unit Økokrim continued. Yara reported they would remain stripped of their “executive management positions … until the situation is resolved with regard to the Økokrim charges.” They will continue to work for Yara, “but without the areas of responsibility they have stepped out of, and not as members of executive management.”

Both men, in their mid- to late 50s, are longimte employees of Yara and its predecessor company Hydro Agri, the former fertilizer unit of Norsk Hydro. Holba started working for Hydro in 1981, Storvik in 1984, and both carried on with Yara when it was spun off from Hydro as a separate stocklisted company in 2004.

Tor Holba PHOTO: Yara

Now both they, their former boss Enger and the company itself are caught up in charges of corruption and alleged bribes paid in connection with Yara’s ill-fated joint-venture expansion into Libya before the country’s regime was toppled, another joint venture involving the production and sale of fertilizer in India, and a Yara-owned company in Switzerland. The company was formally charged in May of last year, after company officials themselves uncovered irregularities and reported them to police. Last week Holba and Storvik were charged personally and brought in for questioning, as was Enger.

Since Enger no longer is employed by Yara, the company didn’t feel obliged to report the charges filed against its former CEO. Newspaper Dagens Næringsliv (DN) reported on Tuesday, though, that he was arrested at the same time as Holba and Storvik, on Friday,  to prevent the three men from conferring with one another. Enger declined comment but his lawyer, Knut Smedsrud, called the arrests “dramatic” and said his client denies any guilt. “He has no knowledge of any form of corruption and denies he has done anything criminal,” Smedsrud told DN.

Yara’s stock dove nearly 6 percent on the news of Holba’s and Storvik’s arrests Friday, which also were described as “dramatic” by various analysts. Yara’s shares recovered somewhat on Monday. The Norwegian state is Yara’s largest shareholder, with a 36 percent stake, and the government minister in charge of business and trade, Trond Giske, called the corruption charges “serious.” Giske added that the government “has, of course, zero tolerance for corruption in all companies where the state is an owner.”

Yara’s chief executive Jørgen Ole Hatlestad said he was “surprised” by last week’s arrests and stressed the company itself was cooperating closely with criminal investigators and continuing its own probe into the charges. Hatlestad took over as CEO after the Libyan and Indian projects were initiated and is viewed as having inherited the corruption problems from Yara’s earlier administration, although Hatlestad was a board member before taking over as top boss.

Holba’s defense attorney, John Christian Elden, said his client couldn’t understand why he’d been charged, telling newspaper Aftenposten that it was Holba who warned Yara executives about possible problems in Libya. Storvik’s defense attorney, Nicolay Skarning, meanwhile, said he hoped his client’s status would change from being charged to being a witness.

Yara, meanwhile, has named Torgeir Kvidal as acting chief financial officer and Jan Duerloo as acting Head of Upstream in Storvik’s and Holba’s absence.

Views and News from Norway/Nina Berglund

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