Corrupted Anti-Corruption Charity vs LLC Delta Wilmar CIS
A new type of fraud has sprouted in Ukraine. Large business owners report cases of extortion with threats coming from one of the charitable organizations. If a potential victim refuses to make a donation to the Charitable Foundation "International Anti-Corruption Courts", they get blacklisted and fall prey to a number of lawsuits, ani-corruption examinations and information attacks.
The managers of LLC Delta Wilmar CIS inform that their company was targeted by the pseudo-charity as well. As a result, the chairman of the board of directors of one of the main traders with Singapore investment Dhruba Charan Panda halted the realization of the investment plan for the building of a USD 150 mln factory in the sea commercial port Yuzhny.
Latifundist.com investigates who stands behind the informational pressure of business in Ukraine, what the fraud scheme is, and what happens if the extorters are not paid the money they demand.
STOP investments
On January 18, the management of LLC Delta Wilmar CIS called a halt to the USD 150 mln investment project in the sea commercial port Yuzhny. It was a forced choice following a number of information attacks against the company in Ukraine and abroad. In particular, the Charitable Foundation "International Anti-Corruption Courts" (IACC) filed a lawsuit to Jakarta High Court accusing the Ukrainian subsidiary of Wilmar International of smuggling and money-laundering.
"At the beginning of January, we received a copy of the letter by the Charitable Foundation "International Anti-Corruption Courts" against Wilmar International and several other companies addressed to Jakarta High Court from Wilmar International (our parent company). In the letter, they demand to prohibit trade, accuse us of smuggling and money-laundering, and request a reward from the government of Indonesia for uncovering a fraud scheme, and a USD 120,000 pay from Wilmar International to cover the expenses of the investigation. The very first read gives a clear idea that it is a far-fetched concoction which has nothing to do with the real state of events," said the director for government and public affairs of LLC Delta Wilmar CIS, Vladislav Talakh.
According to Mr. Talakh, IACC’s "investigation" manipulates the official statistics of palm oil imports by Ukraine and the same statistics of its exports by Indonesia. IACC’s reasoning lack logic and a basic understanding of business processes.
"They say that the difference in export price from Indonesia and import price in Ukraine in the past 4 years amounts to USD 150. What they fail to take into account is export taxes in Indonesia, freight, and special certification which enhance the price of the palm oil. Consequently, they assume that these USD 150 stand for tax evasion and money laundering. That is being plain silly," he added.
The executives of LLC Delta Wilmar CIS pointed out that the smear campaign against the company in Ukraine and the world started at the end of 2016.
According to Boris Marchenko, the counselor of the international trader in Ukraine, that time marks two simultaneous events: the first one being the press release of the plans to build the factory, the second one being the blockage of the operational activity of the company by the State Fiscal Service of Ukraine (SFS). Then, SFS investigated the case of other companies which used the terminal of LLC Delta Wilmar CIS for their operations in 2015. But the problems started after the company ignored the letter from IACC inviting LLC Delta Wilmar CIS to take part in preventing the illegal actions of the law enforcement agencies by donating a "symbolic" amount of money. The letter specifically indicated that those who refuse to make a "charitable donation" would be blacklisted and subjected to anti-corruption examinations. With that, a series of complaints to the PM of Ukraine, the President of Ukraine, SFS, tax service etc. ensued. Eventually, the range of the accusations expanded. The company was accused of alleged illegal obtaining of a berth in the sea commercial port Yuzhny from Odessa Regional State Council, its "Russian connections" etc. (LLC Delta Wilmar CIS was co-founded by the eponymous Singaporean company and a Russian corporate group NMGK (Nizhegorodsky Oil and Fat Product Manufacturer) — editor’s note.)
The accusations resulted in numerous examinations carried out by the tax service, ecologists and representatives of other controlling bodies.
"This causes unease among our shareholders. Despite the memorandum we signed with Odessa Regional State Council, we are obliged to halt all further actions with regard to the realization of our investment program until the matter is resolved," emphasized Dhruba Charan Panda.
Apart from that, IACC filed complaints to Indonesian Customs and Tax Committee, The United States Securities and Exchange Commission, and Singapore Exchange where the parent company of Delta Wilmar CIS is registered.
"IACC aims to exert influence over a company by presenting false accusations against it to various offices and law enforcement agencies. Having received that sort of information, law enforcement agencies are to look for those fake infringements which cannot but damage our reputation. We believe this is how IACC forces companies to cooperate with it. In our opinion, this way IACC provides for its existence," said Boris Marchenko.
Who are these Ukrainian "benefactors"?
Delta Wilmar CIS is not the only company which faced the "examination" after refusing to make the donation to the IACC account. In fact, Ukrainian mass media reported IACC attacking a number of large Ukrainian companies in a similar way, namely, "Borshchahivsky chemical pharmaceutical factory" which lost its contract with Vietnam due to the IACC harassment, "Zhytomyroblenergo", "Pobuzhsky ferro-nickel plant" etc.
There is not much information on the Charitable Foundation "International Anti-Corruption Courts". According to the analytical system YouControl the foundation was established on September 18, 2015 by Ruslana Bronina who signs its letters as executive director of the International Anti-Corruption Court. Another person to speak for IACC is Anatoliy Mesyats who positions himself as chairman of the charity.
Delta Wilmar CIS claim that the foundation is being used as a pretext to approach the company executives by the culprits and view the slander against the company as an extortion attempt. In order to protect its reputation and reveal the truth about IACC, Delta Wilmar CIS filed a complaint against the foundation to the Ministry of Justice of Ukraine but it was turned down.
"To our mind, IACC is a thoroughly thought-out instrument because all our complaints and appeals filed to the law enforcement agencies resulted in formalized replies with no further actions. We were not alone in facing that treatment. Other companies we keep in touch with cannot move any further past filing the complaint either. We have finally witnessed some progress after the PM stepped in," points out Vladislav Talakh.
According to him, last month there commenced legal proceedings based on article 353 of the Criminal Code of Ukraine "Usurpation of Authority."
"I mean they mislead the companies by using an official letterhead, making anti-corruption enquiries, demanding government bodies to take action (revoke a license, cancel VAT payments etc.). However, all these actions are not in their power. They have no right to demand anything of the kind," he says.
The company also searched for justice appealing to the public prosecutor’s office, the Security Service of Ukraine, and the Commercial Court of Ukraine. Unfortunately, the attempts to disprove the slander in court have been to no avail so far.
The hearing of the appeal is scheduled at the Commercial Court of Appeals of Ukraine on January 23. However, Delta Wilmar CIS believe that Ukrainian judges are afraid of the possible pressure of IACC and complaints to the international law offices and therefore they cannot offer the business-world an unbiased hearing. In his interview to the Mirror Weekly, the lawyer of the trader Igor Kyrylenko said:
"The defendant’s representative behaved erratically at the hearing: directed abuse and insults at the participants of the hearing, threatened the judge to file a complaint against him to the Supreme Council of Justice and other offices if he granted the plaintiff’s claim. I cannot tell what the judge’s (S. Mudryi) motive for reaching the decision was. Perhaps, he thought it would be better to reject the claim rather than face numerous complaints from the defendant’s representatives".
Hiding behind the name of a charity
Ukrainian businessmen who have already fallen victim to IACC believe that the foundation may not only serve as a means of reaching financial gain but may also be used a useful tool in the hands of interested parties. The latter may easily turn out to be business rivals. The case of Delta Wilmar CIS allows the conclusion that the "interested party" may be the government for it had been ignoring the complaints against IACC for quite a while.
Some market participants have decided to support their colleagues and firmly believe that such “benefactors” should be fought back.
"When I heard the news about IACC, my first though was to get a firearm and pay a visit to those "benefactors" and people behind them. The legal nihilism of our law enforcement agencies and governing bodies has reached outrageous proportions. At some point, the business will get its last straw. Our patience is already reaching its limits," said executive director of a Ukrainian branch of Risoil S.A. and co-owner of Risoil S.A. Shota Hadzhisvili.
Mr. Hadzhishvili says that one of the partners of Risoil S.A. was targeted by the fake benefactors in the port in a similar fashion: with a threat and a failed attempt to make the partner withdraw all business activity. Shota Hadzhishvili is sure that if this practice continues fostered by the State Prosecutor’s Office, Security Service of Ukraine, Fiscal Services, Ukrainian Sea Ports Authority, there can be no talk of a favorable investment climate in Ukraine.
Commenting on Mr. Hadzhishvili’s statement on his official page Latifundist.com on Facebook, acting director of "Stevedoring company "Olvia" Ruslan Oleinyk suggested looking carefully in the eye of people who mastermind such operations.
"I think the truth is much simpler than it seems. You have no idea how many enquiries on different companies this organization generates in the Cabinet of Ministers of Ukraine and Ministry of Infrastructure of Ukraine. When you read their opuses, you realize that the writer either knows very little of the topic, to put it mildly, or simply churns out tons of similar scribbles for very little money and at times (when he gets lucky) for a hefty sum. Then, when these ravings reach the offices, someone has to write replies :). I agree with Shota, it’s high time we find them and look them carefully in the eye," comments Ruslan Oleinyk.
In the commentary he gave Latifundist.com he mentioned “Olvia” receiving letters from IACC as well.
However, not everyone believes that the actions of the “benefactors” could have haltered the investment project.
"I can’t believe it that the organizations of this kind can actually halt the factory building by the company with billions in revenue and which has been working in Ukraine for years. Let us not forget that the company faced worse problems with the State Fiscal Service in 2013 and 2016. Nevertheless, it stayed back then. Now it has decided to close down. I think it is due to some inner problems," thinks a top-manager of one of the companies operating in the sea commercial port Yuzhny.
The long-awaited government reaction
Delta Wilmar CIS believes that the government has finally decided to acknowledge the numerous complaints of the businessmen against the illegal activities of IACC. During the Cabinet of Ministers session last week, executive director of the Federation of Employers of Ukraine Ruslan Iliichev raised the question of IACC. According to him, 5-7 exporters have already faced a similar situation.
In his turn, PM of Ukraine Vladimir Groysman agreed that the said activities show all the signs of fraud and commanded the Ministry of Justice and the Ministry of Internal Affairs to look into the matter. He also encouraged the Department of Economic Protection to keep it under control because it entails the loss of state revenue.
What does IACC have to say?
While working on this material, the editors got an email from a certain «investigator 934». The subject of the letter saying: "A complaint about a crime and a suggestion of actions to stop the violation of the citizens’ rights and to combat a new type of a hybrid war weged on board of Ukrainian ships and aimed at destroying independent Ukraine by the closest business circle of V. Putin". The author claims that the owner of Delta Wilmar CIS is an MP of the State Duma of the Russian Federation Yuriy Nestorov (however, he is not listed among the MPs of neither this nor the previous convocation — editor’s note). It is stated that IACC grounded its accusations against the company based on government documents from 7 countries (no documents were attached — editor’s note). It is further claimed that the trader might have a hand in USD 1 billion smuggling operations over the past 4 years. Apart from that, the author informs that the founders of IACC received threats from Delta Wilmar CIS representatives. Commenting on the letter for Latifundist.com, Delta Wilmar CIS called it another provocation on behalf of IACC.
It is worth mentioning that Latifundist.com tried calling the charity using the numbers they indicated in their letters to various business offices but we did not get to hear the official statement of the foundation — the numbers were disconnected.
We are closely monitoring the developments of the situation to share the latest news with you.
Keep calm and and follow the updates on Latifundist.com.
Konstantin Tkachenko, Alexei Beskletko, Latifundist.com
