‘Crown witness’ pins down ex-Yara CEO

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Norway’s largest corruption trial ever entered its seventh week with a former top executive testifying that the former chief executive of Oslo-based Yara International had been warned about possible bribery at the large fertilizer firm. He contradicted testimony delivered earlier by Yara’s ex-CEO Thorleif Enger.

Yara International, one of the world's biggest fertilizer producers, is caught in a huge bribery scandal but it hasn't badly affected its share price. Current management seems intent on carrying on, with those charged in the case mostly belonging to the company's earlier top management team. PHOTO: Yara

The corruption trial involving Oslo-based fertilizer firm Yara International entered its seventh week amidst more finger-pointing among Yara’s former senior management. PHOTO: Yara

Ed Cavazuti, who held senior management positions at Yara when the bribery allegedly occurred in the mid-2000s, is one of the state prosecution’s so-called “crown witnesses” in the lengthy trial into corruption at Yara. Newspaper Dagens Næringsliv (DN) reported that Cavazuti, an American, flew in from Florida to testify this week against Enger and three other former executive colleagues at Yara. They are charged with arranging for Yara to pay bribes to the sons of officials in India and Libya, where Yara wanted to do business. The company itself has already accepted the largest fine ever imposed for engaging in bribery.

Courtroom contradictions
DN reported that Cavazuti became the first former Yara executive to testify that Enger, considered a “founder” of Yara after its operations were spun off from industrial firm Norsk Hydro in 2004, was aware that Yara used “consultants” when it was negotiating terms for a fertilizer plant in Libya. Enger has insisted that he had no idea the company was paying large sums to, in the Libya deal, the son of a Libyan government minister at the time.

Enger’s co-defendants have mostly backed that up, but also have indicated that Enger “didn’t want to know” about million-dollar payments they arranged through a firm in Switzerland. Enger, when confronted with the payments, has either said he was unaware of them, defended those he knew about as legitimate payments for consulting work performed, or said he was confident at least some suspicious claims for payment were turned down. Prosecutors believe the payments were bribes made to secure business deals. Enger and his three co-defendants (former Yara executives Ken Wallace, Daniel Clauw and Tor Holba) have pleaded not guilty.

Cavazuti testified that Enger was aware of the Libyan payments. He said in court on Monday that he asked Enger in January 2008 to look into reports of a consultant in Libya. Cavazuti, who was barred from doing business in Libya himself because of US sanctions against Libya, testified that he’d been alerted to the payments by Yara’s longtime trader in Switzerland. Enger allegedly replied that Cavazuti shouldn’t “believe everything he hears.” Cavazuti, who has been questioned for hours by the US’ FBI, also testified about a second meeting, in the early summer of 2008, with Enger and Holba at which Enger asked about how Yara could pay a claim he understood was from a consultant on the Libyan project. Holba has claimed he was the whistleblower about the claims, and was not involved with the consultants.

More finger-pointing
It’s not the first time that Yara’s former executives have pointed figures at one another. Relations have been tense, for example, between Enger and his successor as CEO, Jørgen Ole Haslestad, who ended up being fired by Yara last year over his handling of Yara’s potential merger with a US rival. Haslestad has claimed he wasn’t at all aware of the suspicious consultants before he took over, even though he was a member of Yara’s board before being tapped to be CEO. Enger has complained that he doesn’t understand why Yara, under Haslestad’s leadership, agreed to pay a huge fine for corruption. Haslestad has apologized for publicly agreeing that Yara had a bad business culture under Enger’s leadership.

Last week, another former Yara executive, Hallgeir Storvik, testified that he also heard about the controversial payments in 2007 from the trader in Switzerland, Nejdet Baysan, who in turn believed Enger was aware of them. Storvik testified that he doubted that, and when he heard that Wallace knew about the payments, he didn’t pursue the matter with Enger. Baysan was expected to testify himself last week, but didn’t appear.

The complicated and lengthy trial over corruption at Yara has also revealed descriptions of a company with management “A-” and “B-teams,” and poor relations between some executive vice presidents. Lawyers are trying to determine who knew what in a management culture some say was tainted by rivalry. Holba, who has testified that it seemed “surreal” to be charged in the case, maintains he was the whistleblower. He’s the only one of the four defendants to remain on Yara’s payroll, on paid leave until a verdict is reached. The trial is due to continue through March.

Yara, meanwhile, recently reported strong profits, not least because of the weaker Norwegian krone that boosted revenues in US dollars. The state-controlled company, which also reported increased margins and lower energy costs, is currently being run by an acting CEO, Torgeir Kvidal, while it searches for a new leader.

newsinenglish.no/Nina Berglund