Yara’s ‘founder’ fends off charges

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Thorleif Enger, retired chief executive of large fertilizer firm Yara International, ranked as one of Norway’s most respected businessmen. This week he had to start defending himself in court against bribery charges that could send him to jail for 10 years.

Former Yara CEO Thorleif Enger

Former Yara CEO Thorleif Enger, now on trial for corruption in Oslo. PHOTO: purehelpnews.no

Enger has spent the past four weeks in the Oslo courtroom, listening to two of his former executive vice presidents defend themselves under questioning from prosecutors. On Monday it was his turn to go on the witness stand and he maintained that he didn’t know about large payments Yara was secretly making to the son of the oil minister in Libya, where Yara was keen to expand.

Prosecutors believe Yara’s payments, along with others made in India, amounted to bribes, and the company itself accepted the corruption charges lodged against it last year. Enger, among those singled out as responsible top management at the time the alleged bribes were paid, firmly denies he engaged in bribery and stressed on Monday that he had no motive to do so.

Prosecutors now must grill Enger over what he actually knew. One of his former top colleagues and fellow defendants, Ken Wallace, has been heard saying in a taped conversation played in court that “Thorleif didn’t know very much (about the disputed payments) because he didn’t want to know much.” Enger allegedly didn’t ask for details of the payments that Wallace and his former colleague Daniel Clauw helped arrange on behalf of Yara, so Wallace testified that he didn’t reveal them to Enger. On Monday, Norwegian media reported that Enger was full of praise for his former top Yara colleagues, including both Wallace and Clauw, while they’ve been pointing fingers at others.

Brilliant career ends in court
Enger, age 71, had by all accounts a brilliant career before retiring from Yara in 2008, just as news of the disputed payments began to leak out. He spent many years at Norsk Hydro in a variety of top jobs before leading the fertilizer division that later was spun off to form Yara in 2004. Many view him as Yara’s “founder” of sorts, as he nurtured and guided its spectacular growth. Enger also served as chairman of Telenor on the side and, in 2010, business magazine Kapital named Enger as one of the 10 most influential business leaders in Norwegian history. He made Yara an active player in development programs in Africa and rubbed shoulders with world leaders including UN Secretary General Kofi Annan.

It all came crashing down when he was arrested and indicted on corruption charges in 2012. Prosecutors believe Enger, Wallace, Clauw and Tor Holba, another Yara executive, were responsible for the payments that are suspected of being bribes. Enger and the others call the payments ordinary, if large, compensation to consultants for services rendered. After Yara’s management and board accepted the corruption charges against the company early last year and paid the largest fine in Norwegian corporate history, the four former top executives were left to face the charges against themselves personally.

‘Incredible’
Months of pent-up anger and frustration surfaced when Enger began his testimony on Monday. Newspaper Dagens Næringsliv (DN), which has broken much of the news about corruption at Yara, reported how Enger launched a broadside against the media for its “stream of negative news” about Yara. Enger also claimed that Yara’s management and his successor as CEO at Yara, Jørgen Ole Haslestad, “intensified this negative impression” that Enger “doesn’t recognize” at all. “I don’t think the image that’s been created will be recognized by 8,000 employees at Yara either,” Enger said.

He went on to say that he first became aware of a questionable demand for payment shortly before he retired. He flatly denied he was part of paying any bribes. “For me to take the initiative to corruption at that point in my career is incredible,” Enger testified. “I relied on my colleagues.” He called the payment demand “uncomfortable, but I felt certain it was rejected.”

Asked by lead prosecutor Marianne Djupesland whether he knew about the agreement Yara had with the son of Shokri M Ghanem, the Lybian oil minister at the time in the Gadafi regime, Enger said he did not. Yara was keen to expand into Libya, and according to testimony earlier from Wallace and Clauw, Ghanem had said Yara’s negotiators needed to “sort things out with his son.” That’s when Wallace got in touch with the younger Ghanem, and Clauw arranged to pay him as a consultant through a company in Switzerland. The Swiss company allegedly was reimbursed by overcharging Yara on other bills.

Dubious tranparency
Asked whether he would have approved of such a deal, Enger responded that was difficult to answer, but he would have “made sure there weren’t any conflicts of interest tied to the consultant’s work and the father’s role in Libya, also that the payment must be transparent.”

Asked whether he deemed the payments made through a company in Switzerland on behalf of Yara as transparent, Enger said he would have arranged them “in another manner.”

He said he agreed at the time that his successor Haslestad, who had been on Yara’s board for several years, should be told about the “uncomfortable” payment demands. He said Haslestad “never took contact with me” after Enger had retired, except for once when he needed the name of a someone they’d both worked with. “That’s his privilege,” Enger said, although he suggested Haslestad had “intensified” the impression that Yara, during Enger’s period as CEO, didn’t have the “right culture” to prevent illegalities. Relations between Enger and Haslestad are tense at best, not least since Enger needs to defend himself not just against the corruption charges but the impression they leave that the growth and success he secured for Yara was at least partially gained through bribery. DN has reported how Haslestad has seized every opportunity to put the responsibility for the corruption case on Enger.

Advocated ‘extreme focus’ on reaching goals
Three months have been set aside for the lengthy Yara corruption trial that began right after New Year. Haslestad will also be called upon to testify along with several other top Norwegian executives, some of whom are likely to be called as character witnesses for Enger. Newspaper Aftenposten, meanwhile, cited over the weekend two quotes from Enger that may come back to haunt him, in which he commented on his leadership experience at Yara and Hydro long before he found himself in the Oslo courtroom:

“I’m keen on creating results, and willing to delegate and use competence around me. I also take on things that both are difficult and not so nice. It’s true that there’s both sunshine and rain in life,” he told magazine Teknisk Ukeblad when asked to describe himself as a leader.

And he wrote the following in his own book entitled Det handler om å være best (It’s all about being best): “To be best you must have extreme focus on what is needed to reach the the goal, and you must be willing to do what’s necessary to get there.” Enger was due to testify through this week.

newsinenglish.no/Nina Berglund