The largest corruption trial in Norway’s history, involving charges of bribery at Norwegian fertilizer giant Yara International, got underway in an Oslo courtroom on Monday. It’s not a happy start to the New Year for the former Yara executives now defending themselves, after the company itself avoided further prosecution by accepting a record high fine early last year.
The stage seemed set for an airing of dirty laundry unlike any other seen in Norwegian business. The case targets high-level officials at a company, in which the Norwegian state owns a major stake, that was keen to do business in Libya, India and many other countries. According to prosecutors, the Yara executives allegedly allowed or overlooked large payments made, for example, to the son of Muammar Gadhafi’s oil minister in Libya and to a mysterious company based in a tax haven.
Whistle-blowers within Yara, meanwhile, were allegedly ignored and now former chief executives are pointing the finger at each other. They’re represented by some of Norway’s most prominent attorneys and the list of those called to testify at the trial contains the names of several prominent Norwegian business leaders, past and present.
State prosecutors have indicted Yara’s former high-profile chief executive Thorleif Enger and his former colleagues, top Yara executives Tor Holba, Ken Wallace and Daniel Clauw, all of whom face prison terms of 10 years or more if found guilty. They all pleaded “not guilty” on Monday and deny any wrong-doing. None would allow themselves to be photographed in connection with the court case that drew heavy media attention in Oslo Monday morning.
Enger earlier has expressed disappointment that their former employer, Yara, did not contest the state prosecutors’ charges last year, leaving them to defend themselves after the company itself effectively paid its way out of a court case by accepting fines totaling around NOK 300 million last January (USD 50 million at the time).
Since then, Yara has seemed intent on simply moving forward and trying to forget the corruption allegations that swirled around the company for the preceding five years. It was in late 2008, when Enger retired and was replaced as CEO by Yara board member Jørgen Ole Haslestad, that Haslestad reportedly was made aware there may be trouble ahead. It wasn’t until two years later, however, that Haslestad finally ordered an investigation into corruption allegations after newspaper Dagens Næringsliv (DN) had started revealing them. That led to a probe by state white collar crime investigators as well, which ultimately resulted in the fine against Yara and the indictments against the former executives.
Now Haslestad, who was fired by Yara last year just short of his own pending retirement, has been called to testify, pitting him against his predecessor Enger. Also on the witness list is Egil Myklebust, the former CEO of Norsk Hydro, from which Yara was spun off in 2004. Enger had worked for Hydro for years as had several other top Yara executives. His defense attorney, Ellen Holager Andenæs, told DN just before Christmas that Myklebust and others have been called because they worked with Enger in various periods of his lengthy career “and can speak about the experience they had with him.” They may thus perform a role as character witnesses for a CEO who was popular in his time and featured often in the media.
Prosecuting attorneys, meanwhile, have called a long list of their own witnesses including Sven Ombudstvedt, the CEO of forestry products company Norske Skog who worked many years at Yara. Haslestad has also been called by the prosecution, along with Shokri Ghanem, son of Libya’s former oil minister when Yara was negotiating to set up its ill-fated fertilizer production facility in Libya, and Lone Fønss Schrøder, a Danish executive who sat on Yara’s board and told DN last summer that she detected an “unhealthy” business culture in Yara.
The corruption scandal at Yara has set off investigations in at least 12 countries, also for hidden fortunes tied to the late Gadhafi and members of his toppled regime. The trial also, however, involves Yara’s trading company in Switzerland and business ventures in India and Russia, and lead prosecutor Marianne Djuplesland told DN on Monday that the Norwegian investigation has initiated investigations in Switzerland, the Netherlands and “other countries” including India.
“We believe we can prove that bribes were paid in connection with projects in India and Libya that Yara had,” Djupesland told Norwegian Broadcasting (NRK) as the trial began. “So now we will present this evidence in court.”
Resistance from Yara
She has described the case as “extremely serious” and “challenging,” not least because of its international scope. Yara itself, meanwhile, has claimed it was cooperating with the investigation but DN reported last month that the company tried to block deliverance of internal documents sought by defense attorneys and otherwise has tried to distance itself from the case. Yara also reportedly has sought the return of material earlier seized by investigators. Its corporate behavior has surprised attorneys on both sides of the case.
“Yara of course as the right to challenge the seizures,” Djupesland told DN in December, “but we note that questions about them have been handled by the court four times during the autumn. The courts so far have given the prosecutors and the defense attorneys full support that documents sought shall be delivered and those seized can be held.”
Yara, which made no mention of the corruption trial on its website Monday and has rid it of all photos and almost all mention of Enger, disagrees. “Yara has cooperated with (Norway’s economic crimes unit) Økokrim through the entire process and accepted its fine (last) January,” Yara spokesman Esben Tuman told DN. He confirmed, though, that the company resisted delivering documents containing information that it views as being of a “sensitive or competitive” character.
“The company is, in that regard, finished with this case.” Tuman added. “We are concentrating on what a company should do, with is running our business.”
The Oslo City Court (Oslo tingrett) has set aside three months for the Yara corruption case.